New York Judge Tosses Rudy Giuliani Bankruptcy Case

Rudy Giuliani, a former lawyer of former president Donald Trump, leaves the E. Barrett Prettyman U.S. District Courthouse after jury deliberation in Washington on Dec. 15, 2023. (Madalina Vasiliu/The Epoch Times)

A judge in New York on Friday dismissed Rudy Giuliani’s Chapter 11 bankruptcy case, clearing the way for the former New York City mayor to appeal a $148 million defamation judgment.

U.S. Bankruptcy Judge Sean Lane formalized the decision after saying he was leaning toward doing so on Wednesday. Lawyers for Mr. Giuliani and two former election workers had agreed that dismissing the case was the best way forward.

The bankruptcy filing last year meant that lawyers for the two election workers, Ruby Freeman and Shaye Moss, had to pause enforcing the defamation judgment against him. The judge’s ruling Friday means that the two workers can pursue litigation or existing judgments against him.

Judge Lane ruled evidence in the case showed that Mr. Giuliani had failed to meet obligations of financial transparency required of a debtor and that dismissing the bankruptcy was in the best interests of people to whom the ex-mayor owes money.

“The lack of financial transparency is particularly troubling given concerns that Mr. Giuliani has engaged in self-dealing and that he has potential conflicts of interest that would hamper the administration of his bankruptcy case,” Judge Lane wrote in a 22-page decision. “The income that Mr. Giuliani earns for his individual labors is funneled to his corporate entities.”

Under the order, Mr. Giuliani, a former attorney for former President Donald Trump, isn’t allowed to refile for Chapter 11 bankruptcy for one year, a move the judge said was a decision that is in the “best interest of creditors” of the former mayor.

“The year-long bar (of filing for bankruptcy) will provide time for creditors to pursue ... existing judgments or pursuing unresolved litigation,” his order said.

Lawyers for Mr. Giuliani had asked for a dismissal of the bankruptcy case in a court filing submitted on Wednesday. His attorney, Gary Fischoff, said during a Zoom call with the court that the dismissal would allow his client to appeal the defamation case.

His other creditors had wanted to keep the bankruptcy case going with a court-appointed trustee taking control of Mr. Giuliani’s assets, while Mr. Giuliani requested that the case be converted to a Chapter 7 liquidation, allowing him to have a trustee appointed to take control of his assets and sell them off to help pay creditors.

But Mr. Fischoff said Wednesday that fees related to liquidation would “consume if not 100 percent, a substantial portion of the assets.” It’s not clear if his attorneys will now request the bankruptcy filing to be converted to Chapter 7.

Other Legal Woes

The former mayor is facing criminal charges in Arizona and Georgia in connection to his activity in disputing the results of the 2020 election. He has denied any wrongdoing and pleaded not guilty to the charges, while writing on a near-daily basis on social media that he believes the 2020 election was stolen from former President Donald Trump.

In the Arizona case, Mr. Giuliani, a former federal prosecutor, said during a court hearing last month that he considers “the indictment to be a complete embarrassment to the American legal system.”

Earlier this month, a New York appeals court ruled that Mr. Giuliani is no longer allowed to practice law in the state because he “attacked and undermined the integrity of this country’s electoral process.”

“In so doing, respondent not only deliberately violated some of the most fundamental tenets of the legal profession, but he also actively contributed to the national strife that has followed the 2020 Presidential election, for which he is entirely unrepentant,” the court wrote.

In a social media post on July 2, Mr. Giuliani said he wasn’t surprised that he was disbarred in the state, saying that it was based on “false arguments” and an “activist complaint” against him.

The Epoch Times contacted Mr. Giuliani’s attorneys for comment on Friday.

The Associated Press contributed to this report.