Rudy Giuliani bankruptcy case dismissed, opening door to creditors pursuing collection

A New York federal bankruptcy judge on Friday in a scathing ruling dismissed the Chapter 11 bankruptcy protection case of Rudy Giuliani, immediately exposing the newly disbarred former Trump lawyer to his creditors seeking repayments of his massive debts in other court venues.

Those creditors include two Georgia election workers, to whom Giuliani owes $148 million in civil damages for defamation from a federal district court jury award in December.

“Mr. Giuliani has failed to provide an accurate and complete picture of his financial affairs in the six months that this case has been pending,” Southern District of New York Bankruptcy Court Judge Sean Lane wrote in his dismissal ruling.

“The lack of financial transparency is particularly troubling given concerns that Mr. Giuliani has engaged in self-dealing and that he has potential conflicts of interest that would hamper the administration of his bankruptcy case,” Lane added.

The defamation damages that comprise most of Giuliani’s financial liabilities stem from slanderous statements the former New York City mayor made about the workers, Ruby Freeman and her daughter, Wandrea “Shaye” Moss, when he was trying to overturn the loss of then-President Donald Trump in the 2020 presidential election.

Freeman and Moss, unlike many other Giuliani creditors, supported the idea of dismissing the bankruptcy case, which he filed days after losing the defamation judgment.

Giuliani also agreed to the dismissal, as it would allow him to go forward with an appeal of his court loss to the women, and avoid having a bankruptcy trustee oversee the handling of his assets.

The bankruptcy case’s dismissal comes 10 days after the state of New York disbarred Giuliani for his widespread lies about voter fraud leading to Trump’s defeat in 2020 to President Joe Biden.

Giuliani, a former top federal prosecutor in New York and senior Department of Justice official, is criminally charged in state courts in Georgia and Arizona with felonies related to his efforts to undo Trump’s defeat.

In his ruling on Friday, Lane wrote that he “finds that dismissal of this bankruptcy case with a one year bar to refiling is in the best interests of creditors.”

Lane blasted Giuliani’s conduct in the case, writing, “The record … reflects Mr. Giuliani’s continued failure to meet his reporting obligations and provide the financial transparency required of a debtor in possession.”

“Most significantly, none of Mr. Giuliani’s business entities have made any production [of required information] at all despite being required to do so,” the judge wrote.

“Nor has Mr. Giuliani or his entities identified any legitimate reason why the requested information should not or cannot be produced,” he added. “This failure to provide even basic disclosure about these assets is sufficient in and of itself for a finding of cause.”

A spokesman for Giuliani, in a statement to CNBC, said Giuliani had been denied the ability during the bankruptcy proceeding — which he initiated — to appeal the “grossly unfair $148 million judgment” for Freeman and Moss in the federal appeals court in Washington, D.C.

“This whole bankruptcy case was burdened with many of the same voluminous and overly broad discover requests and other actions — including regular leaks of information — intended to harm the mayor and destroy his businesses,” said Giuliani’s spokesman, Ted Goodman.

“We will continue to pursue justice and we are confident that — in the long run — our system of justice with be restored and the mayor will be totally vindicated,” Goodman said.