WHITE PLAINS, N.Y. — A federal bankruptcy judge indicated Wednesday he might soon dismiss the bankruptcy case involving Rudy Giuliani, former attorney to ex-President Donald Trump. This development could reactivate several lawsuits against Giuliani, including those for defamation and sexual harassment. U.S. Bankruptcy Judge Sean Lane stated he plans to decide by Friday on the requests concerning Giuliani’s financial reorganization.
Giuliani, 80, sought bankruptcy protection in December following a court mandate in Washington, D.C., to pay $148 million to two Georgia election workers he erroneously accused of vote rigging during the 2020 Presidential election. The bankruptcy filing stalled these workers from collecting the judgment while also freezing other lawsuits linked to Giuliani’s efforts to challenge the election outcome on behalf of Trump.
During a recent hearing, Giuliani proposed to convert his bankruptcy into a simple liquidation process, requiring him to sell off nearly all his assets. However, his creditors are divided over how to proceed. One faction has urged the appointment of a trustee to manage Giuliani’s finances and business interests, potentially elongating the bankruptcy process. Another group argues for total dismissal from bankruptcy, enabling creditors to pursue their claims directly.
Judge Lane suggested that dismissing the case might be the most prudent action due to ongoing transparency issues with Giuliani regarding his financial disclosures. Lane expressed concerns about the potential difficulties a trustee might face in obtaining Giuliani’s cooperation, which could further diminish the funds available to repay creditors.
Should the bankruptcy be dismissed, it would expose Giuliani to resumed litigation, but would also afford him greater latitude to appeal the daunting $148 million judgment. Gary Fischofil, representing Giuliani, advocated for dismissal, positing it as the best route for an appellate review of the substantial defamation judgment.
Representatives for the Georgia election workers, Wandrea “Shaye” Moss and her mother Ruby Freeman, argued that the court should eliminate the bankruptcy protections so they might attempt to collect the judgment. Rachel Strickland, their attorney, emphasized Giuliani’s use of the bankruptcy court as a stratagem to pause his legal troubles while maintaining his lifestyle.
Phil Dublin, representing a committee of Giuliani’s other creditors, countered that ending the bankruptcy prematurely could spark a frenzied rush among numerous plaintiffs aiming to sue Giuliani. These creditors include Noelle Dunphy, a former employee who has lodged allegations of sexual assault and wage theft against Giuliani, as well as the voting machine companies Dominion and Smartmatic, which have also sued Giuliani for defamation. Giuliani has consistently denied these accusations.
Besides the civil litigations, Giuliani faces additional legal challenges including criminal charges in Georgia and Arizona linked to his role in Trump’s attempts to overturn the 2020 election results. These controversies have already led to the revocation of his New York law license.
The court’s forthcoming decision on Giuliani’s bankruptcy could thus have significant implications not only for the creditors and litigants involved but also for Giuliani’s capacity to navigate the multiple legal threats he faces.