Rudolph W. Giuliani’s creditors and the judge overseeing his bankruptcy case expressed their frustrations with him in court Monday, after months in which he provided incomplete information about his finances, missed filing deadlines or failed to get his lawyers respond.
Giuliani’s creditors have asked the bankruptcy judge to appoint an independent trustee to take control of his personal and business finances, citing his failures to comply with routine filings and growing suspicion that he is hiding money.
Such an appointment would require a significant amount of power from Giuliani, the former mayor of New York City and former personal lawyer to former President Donald J. Trump. He filed for bankruptcy in December, owing $153 million to about 20 people and entities. The vast majority — $148 million — is owed to two Georgia election officials who a federal court found defamed in 2020 while helping lead Trump’s efforts to overturn his election defeat.
“There is reason to be very concerned here,” said Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York at the end of a nearly three-hour hearing.
Judge Lane and lawyers for Giuliani’s creditors have already raised concerns about his hands-off approach to the bankruptcy process. But on Monday, a representative of 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 Giuliani. .
US 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 losing the protection of his assets that bankruptcy provides. His main assets include his homes in New York and Florida and personal belongings such as his New York Yankees World Series rings.
Schwartz said he has been trying for some time to contact Giuliani’s bankruptcy lawyers to discuss hiring lawyers to represent him in other cases. Debtors, like Giuliani, are required to file a notice with the bankruptcy court if they plan to hire additional lawyers, given the costs.
Schwartz said a lawyer for Giuliani appeared in court in Fulton County, Georgia, where he and others face criminal charges over efforts to overturn the 2020 election results. And other lawyers appeared on Giuliani’s behalf in New Hampshire, where he is suing President Biden for defamation for comments he made in a presidential debate with Trump. (During the 2020 debate, Biden referred to Giuliani as someone who was being used as a Russian pawn.) Giuliani also faces criminal charges in Arizona for efforts to change the results of the 2020 election.
“All the things that are happening here are extremely problematic,” Schwartz said.
Giuliani’s reports to the bankruptcy court about his spending were incomplete and confusing. He has said at times that 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 that he spends more than he earns, and his reported cash balances at the end of one month often conflict with those at the beginning of the following month.
Giuliani’s bankruptcy lawyers said his late and incomplete filings were due in part to his inability to find a bookkeeper or accountant to work for him — something Judge Lane said Monday was troubling and “extremely rare.” in a case like yours.
One of Giuliani’s lawyers, Heath Berger, said he received an email Monday morning from someone interested in the accounting work. And he said Giuliani’s monthly financials for May were expected to be presented in the coming days. But similar promises have been broken before.
“When someone shows you who they are, believe them,” Rachel Strickland, an attorney representing the two Georgia election workers, Ruby Freeman and Shaye Moss, told Judge Lane. “And I’m not going to repeat how Mr. Giuliani showed himself to be dishonest and incompetent and someone who mismanaged his assets.”
Giuliani also ignored court orders throughout the defamation case brought by Freeman and 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 committee’s other members are Noelle Dunphy, a former employee who claims Mr. Giuliani harassed and assaulted her in early 2019; and Lindsey Kurtz, general counsel at Dominion Voting Systems, one of the country’s largest voting machine providers, who accused Giuliani of peddling falsehoods about it after the 2020 election.
