NEW YORK — A federal judge has rejected the bankruptcy petition from former mayor of New York Rudy Giuliani on Friday. He repeatedly cited “uncooperative behavior,” including failure to comply with court orders and failure to disclose sources of income.
While Giuliani’s creditors can now pursue other legal remedies, including seizing his apartments and other assets, the judge’s decision also allows the former prosecutor and staunch ally of former President Donald Trump to appeal a massive $148 million defamation verdict.
Here are some details about the bankruptcy case:
U.S. Bankruptcy Judge Sean Lane sharply criticized Giuliani, calling him an “unruly debtor” who turned his nose up at the bankruptcy process to protect himself from the defamation judgment and other debts.
“Transparency into Mr. Giuliani’s finances has proven to be an elusive goal,” Lane wrote in his decision, adding that he sees “no evidence that this will change.”
Lane expressed concern that Giuliani was funneling his earnings into companies he owned and never reporting income from those entities. He also failed to mention that he was pitching his own brand, “Rudy’s Coffee,” and did not immediately disclose a book deal.
Not at first. Giuliani filed for bankruptcy last December, days after a jury handed down a stunning verdict to two former Georgia election workers who said he spread lies about them in 2020 and their lives turned upside down with racist threats and intimidation. The bankruptcy filing had frozen the collection of that debt.
Giuliani’s lawyers tried to have a trustee sell his assets this month, but changed their minds and on Wednesday pushed for the case to be dismissed. Giuliani’s spokesman said he expects the former U.S. attorney to ultimately be “completely exonerated” in court.
Now that the case has been dismissed, Giuliani is no longer protected from creditors, including judgments, collection actions, foreclosures and repossessions, because of an automatic stay granted under federal bankruptcy law. That means his creditors can try to recover at least some of the money he owes through a variety of means, such as obtaining a court order to seize his assets.
It also means the two election workers can return to court and seek enforcement of their judgment. Their lead bankruptcy attorney said in a statement Friday that they plan to “proceed as expeditiously as possible.” Giuliani is now free to appeal the defamation judgment.
When Giuliani filed for bankruptcy, he listed nearly $153 million in existing or potential debts. That included nearly $1 million in state and federal tax debts, money he owed to lawyers and millions more in potential judgments in lawsuits against him. He estimated at the time that he had assets worth $1 million to $10 million.
In his most recent financial filing in the bankruptcy case, he said he had about $94,000 in cash at the end of May and that his company, Guiliani Communications, had about $237,000 in the bank. He has drawn down a retirement account, which was worth nearly $2.5 million in 2022. In May, he had just over $1 million.