Rudy Giuliani files for Chapter 11 bankruptcy in New York after defamation case

In the documents submitted on Thursday to request protection from New York creditors, Rudy Giuliani disclosed a substantial debt of nearly $500 million. This includes a $148 million obligation to former Georgia election workers Ruby Freeman and Wandrea ArShaye “Shaye” Moss. Additionally, Giuliani acknowledged unspecified amounts owed to election technology firms Smartmatic and Dominion Voting Systems, both of which had implicated him in defamation lawsuits related to the 2020 presidential election. Giuliani appraised his assets at approximately $10 million.

US District Judge Beryl Howell said in her order Wednesday that Giuliani had escaped revealing his worth by refusing to turn over evidence he had in the case before trial, never acknowledged previous court orders for him to reimburse the women for his attorneys’ fee and repeatedly claimed he’s broke and the verdict would severely hurt him.

Ted Goodman, a spokesperson for Giuliani, commented on the Chapter 11 filing, stating that it should not come as a surprise. According to Goodman, expecting Giuliani to meet such a high punitive payment was not reasonable. The Chapter 11 filing, he explained, would grant Giuliani the opportunity to pursue an appeal while ensuring financial transparency under the supervision of the bankruptcy court. This oversight aims to guarantee equitable treatment of all creditors throughout the proceedings.

The decision to file for bankruptcy in New York followed a ruling by the judge overseeing Giuliani’s defamation case in Washington, who ordered him to promptly settle the $148 million owed to Freeman and Moss. Judge Beryl A. Howell expressed concerns about Giuliani potentially concealing assets and emphasized the urgency of the payment due to the women. They had sought $48 million in damages during the trial for the racially motivated attacks and abuse they endured after Giuliani propagated debunked information about them.

Although attorneys for Freeman and Moss are still required to enforce the judgment against Giuliani through potential further legal actions, they are not obliged to adhere to the standard 30-day waiting period to initiate asset seizure attempts.

Legal analysts argue that Giuliani’s bankruptcy filing does not exempt him from settling with the women. Debts arising from defamation and intentional infliction of emotional distress, they assert, cannot be discharged through bankruptcy. While Giuliani may explore the argument of whether his conduct was “willful and malicious” within the framework of bankruptcy law, experts caution that this strategy, previously employed by figures like Alex Jones, might only result in delaying payment or initiating post-verdict negotiations. Judge Howell’s order, however, demands immediate payment from Giuliani.

Ted Goodman, a political adviser and spokesperson for Giuliani, the former Republican presidential candidate and prominent Justice Department official, issued a statement asserting that the recent bankruptcy filing “should be a surprise to no one.”

Goodman contended, “No person could have reasonably believed that Mayor Giuliani would be able to pay such a high punitive amount.” He explained that the bankruptcy filing would afford Giuliani the opportunity and time to pursue an appeal. Additionally, it would ensure transparency regarding his finances under the supervision of the bankruptcy court, aiming to guarantee equitable treatment for all creditors throughout the process.

However, the bankruptcy declaration is unlikely to absolve Giuliani of the $148 million in damages awarded by a jury to former Georgia election workers, Ruby Freeman and Wandrea’ “Shaye” Moss. Bankruptcy laws explicitly prohibit the discharge of debts resulting from a “willful and malicious injury” inflicted on another party.

The recent jury verdict represents the most recent and costliest indication of Giuliani’s escalating financial challenges. These challenges have been exacerbated by ongoing investigations, lawsuits, fines, sanctions, and damages related to his involvement in assisting former President Donald Trump’s efforts to contest the 2020 election, ultimately lost to Democrat Joe Biden.

In September, Giuliani faced a lawsuit from his former lawyer, Robert Costello, seeking approximately $1.4 million in unpaid legal bills. Costello alleged that Giuliani breached their retainer agreement by not fully and promptly paying invoices. Giuliani has sought to dismiss the case, asserting that he never received the relevant invoices, with the case currently pending.

Costello represented Giuliani from November 2019 to July of the following year, handling matters such as an investigation into Giuliani’s business dealings in Ukraine, which led to an FBI raid on his home and office in April 2021, as well as state and federal investigations into his post-2020 election activities.

Further compounding Giuliani’s financial woes, the IRS filed a $549,435 tax lien against him for the 2021 tax year in August. Copies of the lien were submitted in both Palm Beach County, Florida, where Giuliani owns a condominium, and New York, under the auspices of his external accounting firm, Mazars USA LLP. Notably, this is the same firm that ceased representing Trump amid questions about his financial statements.

Despite these challenges, Giuliani, still holding some popularity among conservatives, continues to host a daily radio show in his hometown on a station owned by a local Republican grocery store magnate. Additionally, he hosts a nightly streaming show titled “America’s Mayor Live,” attracting a modest audience on social media.

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