Giuliani Faces Pressure in Bankruptcy Court Hearing

Equipo
By Equipo
6 Min Read

Rudolph W. Giuliani’s creditors and the judge overseeing his bankruptcy case aired their frustrations with him in court on Monday after months in which he has provided incomplete information about his finances, missed filing deadlines or failed to have his lawyers respond at all.

Mr. Giuliani’s creditors have asked the bankruptcy judge to appoint an independent trustee to take over his personal and business finances, citing his failures to comply with routine filings and their growing suspicion that he is hiding money.

Such an appointment would take a significant amount of power from Mr. Giuliani, the former New York City mayor and onetime personal lawyer for former President Donald J. Trump. He filed for bankruptcy in December, owing $153 million to about 20 people and entities. A vast majority — $148 million — is owed to two Georgia election workers whom a federal court found that he defamed in 2020, when he was helping lead Mr. Trump’s efforts to overturn his election loss.

“There are reasons to be very concerned here,” Judge Sean H. Lane of the U.S. Bankruptcy Court in the Southern District of New York said at the end of a nearly three-hour hearing.

Judge Lane and lawyers for Mr. Giuliani’s creditors have previously raised concerns about his disengaged approach to the bankruptcy proceedings. But on Monday, a representative from the U.S. Trustee’s office, a division of the Justice Department responsible for ensuring that debtors and creditors are treated fairly in bankruptcy proceedings, signaled that the office is also losing patience with Mr. Giuliani.

The U.S. Trustee representative, Andrea Schwartz, said the government was prepared to file a motion to dismiss the case. If granted, such a motion could result in Mr. Giuliani’s losing the protection of his assets that bankruptcy provides. His main assets include his homes in New York and Florida and personal belongings like his New York Yankees World Series rings.

Ms. Schwartz said she has been trying to reach Mr. Giuliani’s bankruptcy lawyers for some time to discuss his hiring of lawyers to represent him in other cases. Debtors, like Mr. Giuliani, are required to file notification with the bankruptcy court if they plan to hire additional lawyers, given the costs.

Ms. Schwartz said a lawyer for Mr. Giuliani has appeared in court in Fulton County, Ga., where he and others face criminal charges over efforts to overturn the 2020 election results. And other lawyers have appeared on Mr. Giuliani’s behalf in New Hampshire, where he is suing President Biden for defamation over comments he made in a presidential debate with Mr. Trump. (During the debate in 2020, Mr. Biden referred to Mr. Giuliani as someone being used as a Russian pawn.) Mr. Giuliani also faces criminal charges in Arizona over efforts to change the 2020 election results.

“All of the things that are going on here are extremely problematic,” Ms. Schwartz said.

Mr. Giuliani’s reports to the bankruptcy court about his spending have been incomplete and confusing. He has at times said his only sources of income were Social Security benefits and his radio show and podcast, but none of his monthly reports show any compensation. He reports spending more than he earns, and his reported cash balances at the end of one month often conflict with those at the beginning of the next month.

Bankruptcy lawyers for Mr. Giuliani have said his late and incomplete filings were partially because of his inability to find a bookkeeper or accountant to work for him — something Judge Lane said on Monday was troubling and “exceedingly rare” in a case like his.

One of Mr. Giuliani’s lawyers, Heath Berger, said he received an email Monday morning from someone who was interested in the bookkeeping job. And he said Mr. Giuliani’s monthly finances for May should be filed in the next few days. But similar promises have been broken before.

“When someone shows you who they are, believe them,” Rachel Strickland, a lawyer representing the two Georgia election workers, Ruby Freeman and Shaye Moss, said to Judge Lane. “And I won’t repeat how Mr. Giuliani has shown himself to be dishonest and incompetent and someone who has grossly mismanaged his estate.”

Mr. Giuliani similarly ignored court orders throughout the defamation case brought by Ms. Freeman and Ms. Moss last year in Federal District Court in Washington.

Mr. Giuliani’s creditors selected Ms. Moss to serve on a three-person committee to represent their interests throughout the bankruptcy case.

The other committee members are Noelle Dunphy, a former employee who says Mr. Giuliani harassed and assaulted her beginning in 2019; and Lindsey Kurtz, the general counsel at Dominion Voting Systems, one of the largest voting machine vendors in the country, which has accused Mr. Giuliani of peddling falsehoods about it after the 2020 election.

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