Giuliani Creditors Must Get ‘Aggressive’ After Bankruptcy Tossed

Rudolph Giuliani’s financial wherewithal is set to come under fresh scrutiny following the dismissal of his personal bankruptcy case and resumption of several high-stakes lawsuits against the former New York City mayor.

After an unceremonious end to his seven-month-long bankruptcy, Giuliani is gearing up to make his return to civil court, where he will likely have to contend with lawyers whose sole focus will be to unearth his assets to pay back the debts he owes. That debt includes a $148 million judgment stemming from a defamation case brought by two Georgia election workers.

Giuliani had hoped bankruptcy, which provided the former Donald Trump attorney a reprieve from at least nine lawsuits, would allow him to limit his legal exposure and restructure his tattered finances. But the Chapter 11 proceedings did little to fix his problems. Instead, they punctuated his growing reputation for flouting subpoenas and court orders to produce full and accurate financial records.

“You just have to get aggressive,” said Brian Bauer, CEO of asset recovery firm PHENIX Investigations Inc. “The value is knowing where the hidden assets are so you can collect.”

While creditors gleaned a few new particulars about Giuliani’s financial state during the bankruptcy, they still have work ahead of them to determine what value exists in his wholly-owned businesses and how to force him to pay up.

Lawyers for the Georgia plaintiffs have promised to enforce the judgment as soon as possible. Their lawyers didn’t respond to questions about what steps may be involved in that process, but experts say they’ll have legal powers to further probe Giuliani’s finances and obtain stringent court orders.

“We see guys like this all the time that think they’re bigger than the system,” Bauer said.

Pursuit Continues

Several of the plaintiffs whose suits were paused by the bankruptcy “have a right to a jury trial, making these cases better resolved outside the bankruptcy forum,” Judge Sean H. Lane of the US Bankruptcy Court for the Southern District of New York said when he dismissed the Chapter 11 case on July 12.

For plaintiffs Ruby Freeman and her daughter Wandrea’ Arshaye “Shaye” Moss, who Giuliani falsely accused of rigging 2020 election results to favor Joe Biden, the courtroom pursuit takes on new meaning. Unlike Giuliani’s other legal adversaries who still need to litigate their cases, Freeman and Moss already possess a court judgment and a right to collect on their claims.

Although the pair still has to sort through Giuliani’s opaque finances to determine how much of the judgment can be recovered, they’re positioned to acquire new legal privileges to obtain information and enforce payments.

“A judgment affords you a lot of different things,” Bauer said. “It’s a permissible purpose to look into things that you normally wouldn’t have been able to.”

Plaintiffs who have already obtained a judgment are able to subpoena the defendant’s banking institutions to turn over a financial snapshot and history of transactions, said Bauer.

A Giuliani spokesman didn’t respond to a question regarding his ability to pay the Georgia plaintiffs.

Giuliani initiated his bankruptcy listing $10.6 million in assets against more than $153 million in liabilities. The bulk of his estate consists of two multimillion-dollar residences: a Manhattan penthouse apartment and a condominium in Palm Beach, Fla. The New York apartment remains on the market for an asking price of $5.7 million.

Despite his legacy in the legal world as a federal prosecutor who brought down mobsters and later earned millions annually as a Big Law attorney, Giuliani entered bankruptcy with suspended legal licenses stemming from his efforts to overturn the 2020 presidential election. He said he came to rely on retirement accounts, income from paid speaking arrangements, and hosting a daily radio show and podcast.

Giuliani’s disclosures in bankruptcy revealed his collection of fine jewelry and valuable sports memorabilia. In addition to listing more than 20 luxury brand watches, the former mayor also said he owned three Yankees world series rings, a signed photo of Reggie Jackson, and a shirt signed by Yankees great Joe DiMaggio.

While creditors have disputed what they say is Giuliani’s lowball $30,000 valuation of his jewelry collection, they trained a sharp focus on finding other assets and receivables that they believe should be brought into his estate and made available to pay down his debts.

Yankees Gear, Coffee, and Trump

During the bankruptcy, an official committee of creditors launched an investigation into the structure of his personally owned businesses and the sources of legal funds that raised money for his defense in various lawsuits and criminal proceedings. Further, the group looked to uncover more details about some $2 million in unpaid legal fees that Giuliani acknowledged he was owed for work on Donald Trump’s prior presidential campaign.

The committee’s sprawling investigation—led by former law enforcement professionals—grew to include information requests from Giuliani business entities, personal assistants and family members, the billionaire owner of WABC radio, online media networks that host Giuliani’s broadcasts, and a South Florida coffee producer that helped launch the mayor’s own line of branded roasts in May.

Still, Giuliani produced sparse details about his financial affairs and repeatedly failed to give a detailed account of how funds flowed into and out of his businesses.

Stephen Starr, an attorney with Starr & Starr PLLC who helps clients enforce judgments, said plaintiffs will typically issue restraining notices that are used to freeze property held by the defendant and third parties.

In New York, where Giuliani lives, a judgment creditor gets broad subpoena power and can seek a contempt ruling against an uncooperative defendant, he said.

They may also be able to use the judgment to establish a lien on real estate, he added.

“Those are typical first steps,” said Starr. “That’s very powerful.”