A US judge on Wednesday said he is likely to discontinue Rudy Giuliani’s bankruptcy process, which would enable lawsuits for defamation, sexual harassment and other claims to proceed in other courts against Donald Trump’s former lawyer.
Sean Lane, a US bankruptcy judge, said at a court hearing in White Plains, New York, that he would rule on Friday on competing requests from Giuliani and his creditors about the future of his bankruptcy case.
Giuliani, 80, filed for bankruptcy protection last December after a Washington DC court ordered the former New York City mayor to pay $148m to two Georgia election workers, Ruby Freeman and Shaye Moss, whom he had falsely accused of rigging votes in the 2020 presidential election, following Joe Biden’s victory over Trump.
The women had described how such public lies and hounding by the powerful Republican operative wrecked their lives.
The bankruptcy process had prevented the election workers from collecting on that judgment, while freezing other lawsuits stemming from Giuliani’s work for the former Republican president, as he sought to overturn his loss in the 2020 election.
Last week, Giuliani asked to convert his personal bankruptcy case into a straightforward liquidation, which would force him to sell nearly all of his assets. One group of creditors asked Lane to appoint a trustee to take over Giuliani’s finances and businesses, which could lead to a lengthy and contested bankruptcy liquidation, while another group said Giuliani should be kicked out of bankruptcy altogether.
All three options pose significant risks for Giuliani.
Lane said dismissal was likely the best option, given the difficulties the court has had in getting straight answers from Giuliani about his finances. A dismissal of his bankruptcy would allow Giuliani’s creditors to resume lawsuits against him, but it would also give him more freedom to appeal the $148m defamation judgment that prompted him to seek the legal protection afforded by a bankruptcy filing.
“We believe that the debtor’s best chance of getting an appellate determination would be dismissal,” Giuliani attorney Gary Fischoff said during Wednesday’s court hearing.
Rachel Strickland, representing Moss and her mother, Freeman, said Giuliani should be kicked out of bankruptcy so her clients can try to collect against him.
Giuliani “regards this court as a pause button on his woes while he continues to live his life unbothered by creditors”, Strickland told Lane.
A committee representing Giuliani’s other creditors asked Lane to instead appoint a trustee to take over Giuliani’s finances and businesses. Committee attorney Phil Dublin said ending the bankruptcy now would create a “race to the courthouse” among the many people who have sued Giuliani.
Giuliani’s other creditors include former employee Noelle Dunphy, who has accused Giuliani of sexual assault and wage theft, and the voting machine companies Dominion and Smartmatic, who have also sued Giuliani for defamation. Giuliani has denied the allegations.
In addition to the civil lawsuits, Giuliani denies criminal charges in Georgia and Arizona relating to election interference.
Reuters contributed reporting
