U.S. Bankruptcy Judge Sean Lane said on Wednesday that he was leaning toward throwing out the case of former New York City Mayor Rudy Giuliani.
In December, Giuliani declared bankruptcy after a jury awarded Ruby Freeman and her daughter Wandrea ArShaye “Shaye” Moss, two Georgia election workers, $148 million in a defamation lawsuit against him. In 2020, as attorney for ex-President Donald Trump, Giuliani falsely accused the mother and daughter of adding ballots for President Joe Biden.
According to the Associated Press, upon filing for bankruptcy, Giuliani listed nearly $153 million in debts, including close to $1 million in tax liabilities and substantial amounts in potential lawsuit judgments. He estimated his assets at $1 million to $10 million. Recent financial disclosures revealed he had about $94,000 in cash and his company, Giuliani Communications, had approximately $237,000 in the bank. His primary income source recently has been a retirement account, which saw significant withdrawals.
On Wednesday, during a hearing in the bankruptcy case, Lane, who plans to issue a decision by week’s end, said he was leaning toward dismissal.
“I’m leaning toward dismissal, frankly, because I’m concerned that the past is prologue,” Lane said in a hybrid in-person and Zoom status hearing in White Plains, New York.
Newsweek reached out to Giuliani’s spokesperson via email for comment on Wednesday.
If dismissed, it would halt Giuliani’s pursuit of bankruptcy protection, ending his bid to absolve his debts, as creditors could seek alternative legal methods to reclaim their money, such as court orders, to seize his properties.
Freeman and Moss could also resume their collection efforts on the $148 million judgment in the original court they won their lawsuit in Washington, D.C., avoiding additional bankruptcy court fees. In addition, Lane said that a dismissal would include a 12-month ban on Giuliani reapplying for bankruptcy protection.
During Wednesday’s hearing, lawyers for Giuliani and his biggest creditors Freeman and Moss agreed dismissal was the best way forward.
According to the Associated Press, Giuliani’s lawyer, Gary Fischoff, supported the dismissal, arguing it would allow Giuliani to appeal the defamation case.
Lawyer Rachel Strickland, representing Freeman and Moss, in her address to the court, said she was not opposed to Giuliani having his bankruptcy dismissed if it meant that creditors could recover.
However, Strickland previously accused Giuliani of exploiting the bankruptcy process as a “bad-faith litigation tactic,” asserting he views the court as a “pause button on his woes.”
“The question here is always going to be the cat-and-mouse game of what dollar can be funneled outside of the estate,” Strickland said. “Out in the real world, outside of bankruptcy, all dollars are fair game for everyone, and Mr. Giuliani has to continue to live and do whatever it is he is able to do with his name, likeness, and commentary in order to make a living.”
In a statement emailed to Newsweek, Strickland said Freeman and Moss are looking forward to the chance to “execute on their judgment.”
“Ruby and Shaye have been waiting patiently for Giuliani to have consequences for his horrific actions. As it looks like he will no longer be able to hide out in bankruptcy, that day is coming soon. We look forward to being able to promptly execute on their judgment,” Strickland said.
Lane’s comments come after Giuliani earlier this month requested converting the case to Chapter 7 liquidation, involving a trustee to control and sell his assets to pay creditors.
Lane denied the request, saying it would not serve the best interests of those to whom the former Trump lawyer is indebted.
Freeman and Moss also have a pending request to declare that the $148 million judgment cannot be discharged during Giuliani’s bankruptcy.
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