The federal judge overseeing Rudy Giuliani\u2019s bankruptcy proceedings threatened to force the former New York mayor to testify under oath about the state of his finances after Giuliani failed to explain how he plans to pay roughly $350,000 in administrative fees incurred in the case.<\/p>\n
U.S. Bankruptcy Judge Sean Lane in the Southern District of New York said in a written order Thursday that he is holding off on finalizing his decision to dismiss Giuliani\u2019s bankruptcy case and may decide to keep the proceedings going after Giuliani claimed \u201che does not have the ability to pay such fees\u201d \u2014 which must be resolved before the case can be closed.<\/p>\n
But Lane, who has been critical of Giuliani\u2019s lack of financial transparency throughout the proceedings, was skeptical of the former mayor\u2019s claim that he doesn\u2019t have the money, citing Giuliani\u2019s ownership of two apartments that are of \u201cconsiderable value.\u201d<\/p>\n
\u201cWhat little we know about the Debtor\u2019s financial situation makes his stance here more troubling,\u201d Lane wrote. \u201cEven assuming that the Debtor does not have the funds on hand to immediately pay these bankruptcy expenses, he certainly has considerable assets upon which he can draw to pay such expenses.\u201d<\/p>\n
Echoing his remarks in a hearing last week, Lane said the \u201cmost obvious path forward is to initiate proceedings to assess the details\u201d of Giuliani\u2019s \u201ccurrent financial circumstances\u201d with an evidentiary hearing that would potentially include \u201cthe disclosure of documents\u201d and \u201ctestimony under oath\u201d by Giuliani.<\/p>\n
A spokesman for Giuliani did not immediately respond to a request for comment.<\/p>\n
The order comes two weeks after Lane threw out Giuliani\u2019s bankruptcy case, paving the way for numerous creditors, including two former Georgia election workers who won a $148 million defamation claim against the former mayor, to pursue and potentially seize his assets.<\/p>\n
But the case can\u2019t be dismissed until Giuliani explains how he plans to pay fees in the case, including expenses his creditors incurred when they retained an investigative accounting firm made up of former CIA and FBI officials to probe his finances.<\/p>\n
That hiring came after Giuliani repeatedly failed to fully disclose his cash and assets, including information about his businesses and other holdings that is required in bankruptcy proceedings \u2014 a lack of transparency the judge has called \u201ctroubling.\u201d<\/p>\n
On July 12, an attorney for Ruby Freeman and Shaye Moss, former Georgia election workers Giuliani falsely accused of helping to steal the 2020 presidential election, filed a motion asking the judge to order Giuliani to immediately turn over all of the cash in his bank account. They also pressed that Giuliani be ordered to sign over control of his New York apartment to a trustee appointed by the group to manage its sale \u2014 all to resolve costs related to the bankruptcy proceedings.<\/p>\n
Lane declined to immediately take up the issue, calling it \u201cpremature.\u201d But in a hearing last week, Rachel Strickland, an attorney for Freeman and Moss, urged the judge to take action quickly, accusing Giuliani of financial \u201cshenanigans\u201d and continuing to spend freely without authorization from the court.<\/p>\n
Strickland said records from the only bank account Giuliani had disclosed to creditors showed that in recent days he had burned through more than half of the $60,000 in the account \u2014 including $39,000 in fees related to his Florida condo and New York apartment. Giuliani also spent money on travel and other expenses related to the Republican National Convention in Milwaukee, she claimed.<\/p>\n
Giuliani did not appear at the virtual hearing. And his attorneys, Heath Berger and Gary Fischoff, told Lane they\u2019d had trouble reaching their client \u2014 an answer that frustrated Lane, who ordered them to file a plan by noon last Thursday about how Giuliani would pay. He warned if they didn\u2019t, he\u2019d summon Giuliani to the \u201cwitness box\u201d to explain himself.<\/p>\n
But at the deadline, there was only a letter from Berger, who told the judge that Giuliani\u2019s legal team had been in \u201cextensive negotiations\u201d with attorneys for the creditors but there was not yet an agreement. \u201cThe parties are still talking, and I am hopeful a joint resolution will be forthcoming shortly,\u201d he wrote.<\/p>\n
A short time later, Strickland faxed her own letter in challenging Berger\u2019s claim of \u201cextensive negotiations.\u201d \u201cMuch of the day has been spent with Debtor\u2019s counsel trying to reach his client,\u201d she wrote.<\/p>\n
The next day, Berger filed a letter disputing Strickland\u2019s claim, telling the judge he \u201chad been in contact all day\u201d with Giuliani, who had authorized him to make \u201cnumerous offers to try to resolve\u201d the dispute over court fees. The letter did not say what those offers were.<\/p>\n
On Tuesday, attorneys for Giuliani sent another letter to the court defending their client\u2019s spending on travel to Milwaukee for the GOP convention. The filing included a letter from My Pillow CEO Mike Lindell, a fellow election denier and Trump associate, who told the court his media company, FrankSpeech, paid for Giuliani\u2019s \u201cfirst class airfare and hotel\u201d for the RNC.<\/p>\n
Lindell had previously been subpoenaed by creditors in the Giuliani\u2019s bankruptcy case amid questions about Giuliani\u2019s finances and income.<\/p>\n
The back-and-forth comes nearly seven months after Giuliani sought bankruptcy protection after he was ordered to immediately pay millions in damages to Freeman and Moss for the false claims he made about them in the aftermath of the 2020 election when he was serving as former president Donald Trump\u2019s personal attorney.<\/p>\n
In court documents, Giuliani has listed roughly $153 million in debts to at least 20 people and businesses, including Freeman and Moss. A list of top creditors filed in February said Giuliani owes more than $3.7 million in unpaid legal fees to three law firms \u2014 though he is disputing some of those bills \u2014 and more than $1 million in state and federal taxes.<\/p>\n
The former federal prosecutor has claimed about $11 million in assets \u2014 including an estimated $5.6 million New York apartment and his Palm Beach, Fla., condo, which is valued at $3.5 million. While Giuliani has put his New York property on the market, he has so far successfully resisted selling his Florida home, with one of his lawyers claiming the sale could render the 80-year-old former mayor \u201chomeless.\u201d<\/p>\n
A financial disclosure report filed last month said Giuliani had less than $100,000 in the bank at the end of May and was funding his living expenses through a rapidly diminishing retirement account. But creditors have repeatedly complained that Giuliani has not filed a complete picture of his net worth and have accused him of hiding money and assets.<\/p>\n
In recent weeks, Giuliani repeatedly shifted legal strategies in the case. In December, he sought Chapter 11 bankruptcy protection, which allows an individual to reorganize and file a plan to pay off debts. But on July 1, Giuliani changed course, asking a judge to reclassify his case under Chapter 7 bankruptcy, which would hand control of his personal and business finances to an outside trustee to liquidate. The request prompted immediate objections from the election workers and other creditors who accused Giuliani of more delay tactics.<\/p>\n
On July 10, an hour before a hearing on the matter, Giuliani abruptly changed position yet again, asking the judge to dismiss the bankruptcy case altogether. While some of the creditors pressed the judge to appoint a trustee, Freeman and Moss supported the dismissal and Lane ultimately agreed \u2014 saying there was no evidence that Giuliani\u2019s \u201cuncooperative conduct will change.\u201d<\/p>\n
A dismissal would allow Freeman and Moss and other creditors to pursue legal remedies to collect money owed to them by Giuliani. It also allows other pending lawsuits against the former mayor that had been frozen by the bankruptcy proceeding to resume, including defamation suits by the voting machine companies Dominion Voting Systems and Smartmatic and a sexual harassment and wage theft claim by former Giuliani associate Nicole Dunphy.<\/p>\n
All are part of a committee of \u201cunsecured creditors\u201d that had sought relief in the bankruptcy case.<\/p>\n
But last week, Lane threatened to hold off on finalizing that order to dismiss Giuliani\u2019s bankruptcy, to press him to pay the creditor costs first \u2014 a requirement by law but also an acknowledgment that it may be the only money that any of the creditors see in the near future as they seek to collect what Giuliani owes them.<\/p>\n
\u201cThere are a lot of bad things that can happen,\u201d Lane warned Giuliani\u2019s attorneys if their client didn\u2019t comply. \u201cThere are a lot of things your client doesn\u2019t want to happen that will happen.\u201d<\/p>\n
On Thursday, Lane reiterated that warning in writing and said the court may have to reconsider whether closing Giuliani\u2019s bankruptcy case is the \u201cappropriate course of action.\u201d<\/p>\n
The judge suggested he could re-entertain the appointment of a trustee who would oversee Giuliani\u2019s finances and \u201cpromptly liquidate\u201d his assets but said he wanted to hear from attorneys for Giuliani and his creditors by next week before \u201cdetermining the path forward.\u201d<\/p>\n<\/p>\n
The federal judge overseeing Rudy Giuliani\u2019s bankruptcy proceedings threatened to force the former New York mayor to testify under oath about the state of his finances after Giuliani failed to explain how he plans to pay roughly $350,000 in administrative fees incurred in the case. U.S. Bankruptcy Judge Sean Lane in the Southern District of […]<\/p>\n","protected":false},"author":0,"featured_media":6734,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-6733","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/6733","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=6733"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/6733\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/6734"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=6733"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=6733"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=6733"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}