In a 22-page order, Lane said Giuliani “has failed to comply with his reporting obligations and provide the financial transparency required of his debtors,” calling his conduct “troubling.” The order also bars Giuliani from filing for bankruptcy protection for one year.
Giuliani spokesman Ted Goodman called the decision “yet another example of the effort to punish Mr. Giuliani.” In an email, he said, “We will continue to pursue justice and are confident that in the long run, the justice system will be restored and the Mayor’s innocence will be fully vindicated.”
Lane’s ruling The case comes as creditors allege that Giuliani, the former New York mayor and personal lawyer to former President Donald Trump, used the legal process to hide details of his assets and avoid paying former campaign staff.
Friday’s order allows Freeman, Moss and other creditors to pursue legal remedies to recover money owed to Giuliani. It also allows other pending lawsuits against the former mayor that were frozen by the bankruptcy proceedings, including defamation suits by voting machine companies Dominion Voting Systems and Smartmatic, and sexual harassment and wage theft claims by Giuliani’s former aide Nicole Dunphy.
They are all part of the “unsecured creditors” committee that was seeking relief in the bankruptcy case.
A committee of Mr. Giuliani’s other creditors had urged the bankruptcy proceedings to continue and for a receiver to be appointed to oversee Mr. Giuliani’s finances, arguing that this was the only way to get a full and accurate picture of his cash and assets after months of inconsistent and incomplete financial statements and failure to provide financial information about his businesses and other assets.
But in a ruling Friday, Judge Lane rejected the proposal, saying there was “little reason to conclude that appointing an outside receiver would change” Giuliani’s “uncooperative behavior.”
“Mr. Giuliani failed to provide accurate and complete information about his financial situation during the six months that this litigation was pending,” the judge wrote. “Transparency about Mr. Giuliani’s financial situation has proven an elusive goal.”
Lawyers for the creditors, citing suspicions that Giuliani’s obstruction was an attempt to conceal funds, have hired former CIA and FBI investigators to search for hidden assets. They are looking for individuals with whom Giuliani has done business, including MyPillow CEO Mike Lindell, a fellow election denier and close Trump ally who received a subpoena last month. As part of their debt collection efforts, the creditors have also signaled that they may sue parties to whom they say Giuliani owes them money, which could include Trump.
At a February court hearing, Giuliani argued that Trump still owes him “approximately” $2 million in unpaid legal fees related to his efforts to overturn his 2020 election loss, though he suggested the debt was owed to the Trump campaign or the Republican National Committee. But in a Feb. 27 court filing, Giuliani noted he could seek unpaid legal fees from Trump personally.
In dismissing the lawsuit, Lane cited potential difficulties in recovering fees that Giuliani claims he is owed by President Trump and the Republican National Committee, saying the investigation and possible recovery are “complex matters with uncertain outcomes.”
Court documents say Giuliani owes about $153 million to at least 20 individuals and companies, including Moss and Freeman. According to a list of major creditors filed in February, Giuliani owes more than $3.7 million in unpaid legal fees to three law firms (some of which he disputes), and he also owes more than $1 million in state and federal taxes.
Giuliani, the former mayor and federal prosecutor, claims assets worth about $11 million, including a New York apartment worth an estimated $5.6 million and a mansion in Palm Beach, Fla., that he values at $3.5 million. While Giuliani has put his New York property up for sale, he has so far resisted selling his Florida home, with one of his lawyers arguing that a sale could leave the former mayor “homeless.”
According to a financial disclosure report filed last month, Giuliani had less than $100,000 in his bank account at the end of May and was covering his living expenses from a rapidly dwindling retirement account.
But creditors have repeatedly complained that Giuliani has not provided a complete profile of his net worth, as required by bankruptcy proceedings, and are seeking information about his businesses and investments.
Both creditors and the judge criticized Mr. Giuliani for ignoring court deadlines and filing incomplete and inconsistent monthly financial disclosures, raising questions about his spending and income. Mr. Giuliani’s lawyers responded by citing administrative problems, including problems with hiring an accountant.
“From day one, Mr. Giuliani has treated this case and the bankruptcy proceedings as a joke, hiding behind the guise of an aging, doddering man who could not even remember the address of his multi-million dollar second home and who claimed he would be homeless if he did not sell his multi-million dollar second home,” Philip C. Dublin, an attorney for the creditors’ committee, said in a July 8 court filing, accusing Mr. Giuliani of handling the bankruptcy proceedings with “utter disrespect and irresponsibility.”
Giuliani has shifted his legal strategy in the case multiple times in recent weeks. In December, he filed for Chapter 11 bankruptcy, which allows individuals to reorganize and file debt repayment plans. But on July 1, Giuliani changed course and asked a judge to reclassify his case as Chapter 7 bankruptcy, which would place his personal and business assets in an outside receivership and allow them to be liquidated. Campaign staff and other creditors quickly opposed the request, accusing Giuliani of further delaying tactics.
On Wednesday, about an hour before a hearing on Giuliani’s request, the former mayor abruptly changed his tune again, asking the judge to dismiss the bankruptcy case in its entirety.
The hearing then turned contentious, with lawyer Rachel Strickland of the law firm Freeman & Moss accusing Giuliani of acting in bad faith and using the same delay tactics he used in the defamation lawsuit, leading her client to conclude that Giuliani’s bankruptcy case should be dismissed.
Strickland suggested that if the bankruptcy proceedings continued, Giuliani could be accused of “willfully and fraudulently” concealing details of his finances in violation of bankruptcy law, and urged the judge to end the case “unless the judge is willing to consider putting the mayor of the United States in jail.”
That infuriated Giuliani, who tried to call into the hearing to argue with Strickland, prompting Judge Lane to scold him for speaking out of turn, and when Giuliani interrupted him, claiming Strickland’s comments were “highly defamatory,” Judge Lane threatened to mute him.
Judge Lane said “history is a sign” and said he believed Giuliani would continue to avoid transparency with the court, suggesting he was leaning toward dismissing the lawsuit, a position he reiterated in Friday’s ruling. “The Court sees no evidence that this situation will change in the future,” the judge wrote.
Giuliani’s lawyers have argued that dismissing the lawsuit would allow the former mayor to appeal the defamation judgment. A bankruptcy court judge had blocked that appeal because the lawsuit was frozen. But the judge’s order in the case requires Giuliani to continue his appeal and post a $148 million bond to block Freeman and Moss from collecting on his money.
It was not immediately clear whether Giuliani has the wherewithal to do so. Friday’s ruling adds to the legal repercussions Giuliani has faced since falsely claiming the 2020 election was stolen from him along with Trump and other allies. He faces criminal charges in Georgia and Arizona for his role in the effort. Giuliani denies any wrongdoing, continues to claim daily that the 2020 election was stolen, and has pleaded not guilty in both cases.
Last week, Giuliani was formally disbarred in New York state after a court found he had repeatedly lied about Trump’s election loss. A similar move is possible in Washington: A commission that oversees the bar in Washington, D.C., recommended in May that he be stripped of his right to practice law because of a “frivolous” lawsuit he filed to block the certification of Pennsylvania’s 2020 election results.
According to bankruptcy filings, Giuliani was abruptly fired by New York’s WABC radio in May after the station’s owners said the former mayor had been ordered to stop talking about the 2020 election but had ignored allegations of fraud and “private lawsuits related to those allegations,” eliminating one of his few regular sources of income.
Prior to Lane’s decision, his campaign staff and a creditors committee filed a motion calling for Giuliani to transfer all of his cash in bank accounts and control of his New York apartment to a trustee appointed by the group to pay legal and investigative costs related to the bankruptcy proceedings.
In his ruling, Judge Lane called the issue “premature” and refused to address it immediately.
