Tensions in Rudy Giuliani’s bankruptcy case are coming to a head, with his creditors hoping for the drastic remedy of having a third party take control of the former New York City mayor’s finances.
Since Giuliani filed for bankruptcy protection, spurred by a $148 million defamation verdict, his creditors have accused him of hiding assets and a coffee deal, spending egregiously, and failing to timely file required paperwork.
They have now had enough. On Monday, lawyers representing Giuliani’s creditors will return to bankruptcy court in New York, hoping to convince a judge that the time has come for a trustee to step in.
“Simply put, Mr. Giuliani and his bankruptcy case have reached an impasse,” the unsecured creditors committee wrote in their motion.
In December, Giuliani hastily filed for Chapter 11 bankruptcy after a jury ordered him to pay two Georgia election workers $148 million for defaming them by spreading a baseless conspiracy on behalf of former President Trump in 2020 that they were involved in mass election fraud. He has vowed to appeal.
Bankruptcy automatically froze the poll workers’ efforts to collect the massive sum. And by filing for Chapter 11 — as opposed to Chapter 7, a more common type of individual bankruptcy that would lead to liquidation — Giuliani has remained in control of his assets, for now.
“Mr. Giuliani went into Chapter 11 because he wanted to retain control. This is the key to Mr. Giuliani’s bankruptcy,” said Daniel Gielchinsky, a partner at DGIM Law who specializes in bankruptcy law.
