New York, NY — The Chapter 11 bankruptcy case of Rudy Giuliani, the former mayor of New York City and attorney to Donald Trump, was dismissed by a U.S. Bankruptcy Court on Friday due to Giuliani’s non-compliance with financial disclosure requirements.
Giuliani, who once gained national prominence for his leadership following the Sept. 11 terrorist attacks, sought bankruptcy protection in December, claiming financial duress following a hefty $148 million defamation judgment. The judgment was related to his false accusations of election fraud against Ruby Freeman and Wandrea’ ArShaye Moss during the 2020 presidential election, which reportedly caused significant personal and professional damage to both women.
The court was deliberating over two pivotal motions in Giuliani’s bankruptcy proceedings. The Official Committee of Unsecured Creditors initiated one motion for the appointment of a Chapter 11 trustee, arguing Giuliani’s failure to meet requisite financial disclosures. Chapter 11 bankruptcy typically permits a debtor to reorganize and continue business operations while repaying creditors gradually.
Giuliani, on the other hand, filed a motion to convert his bankruptcy to a Chapter 7 case, which would result in his assets being sold off to satisfy creditor claims. However, the court concluded that Giuliani lacked the inherent right to such a conversion due to his failure to fulfill basic procedural requirements like accurate financial reporting, timely operational updates, and responsiveness to discovery demands.
The court expressed that Giuliani’s record of incomplete and inaccurate financial disclosures and his delayed submission of operational reports contradicted the transparency and cooperation necessary for an effective asset liquidation under Chapter 7. Such inconsistencies can disrupt the fair distribution of assets and potentially conceal funds that should be allocated to creditors.
Moreover, Giuliani’s noncompliance suggested possible mismanagement or a disregard for the bankruptcy process, potentially complicating and prolonging the proceedings. The court found that because of these factors, dismissing the bankruptcy case or appointing a trustee would more appropriately safeguard creditor interests than would converting the case to Chapter 7.
With an agreement to the dismissal, Giuliani will be barred from filing for bankruptcy for the next year. This allows creditors to pursue their claims independently outside of the bankruptcy system, seeking recovery through other legal avenues.
This legal outcome marks a significant blow to Giuliani, whose professional and financial troubles have mounted in recent years, overshadowing his earlier political achievements and influence. Moving forward, Giuliani faces the challenge of addressing these substantial financial claims while his avenues for relief have narrowed significantly with this recent court decision.