Giuliani Bankruptcy Lingers as $400,000 Lawyer Bill Goes Unpaid

Rudolph Giuliani faces a possible evidentiary hearing over his financial affairs, after failing to come up with workable terms for the dismissal of his personal bankruptcy case.

Tossing the former New York City mayor out of bankruptcy pursuant to a scathing July 12 decision is proving to be a challenge. Giuliani owes roughly $400,000 in fees to professionals hired in his Chapter 11 case and must figure out how to pay the administrative expenses before Judge Sean Lane of the US Bankruptcy Court for the Southern District of New York will sign an order of dismissal.

Giuliani has proposed satisfying the Chapter 11 bill by providing a lien against his Manhattan apartment—an Upper East Side penthouse currently on the market for $5.7 million—because he doesn’t have enough cash available.

But because the former Trump attorney has spent months avoiding questions about the assets at his disposal, “it is unclear what funds he has available to pay these administrative costs,” Lane said in a court order Wednesday.

“The most obvious path forward is to initiate proceedings to assess the details of the Debtor’s current financial circumstances with the ultimate goal of crafting a detailed dismissal order that ensures the payment of the estate’s administrative expenses,” the judge said. “Such a route will inevitably include disclosure of documents and might include testimony under oath.”

Lane’s order asks that Giuliani and his largest creditors submit filings by the end of the month on what they believe is the most appropriate path forward.

Although Giuliani’s repeated failure to produce financial records is what led the court to dismiss his bankruptcy, it could now be the motivating reason to keep the case in Chapter 11, Lane said.

“While the court previously announced its intention not to waiver on dismissal of the case, there may come a point when dismissal is no longer an option because the Debtor is unwilling to pay these administrative expenses,” he said. “Under such circumstances, the court may be forced to reevaluate the alternative of a Chapter 11 trustee to supervise the administration of the Debtor’s financial affairs and to promptly liquidate assets such as the New York apartment as appropriate.”

A representative for Giuliani didn’t immediately respond to a request for comment.

Giuliani filed for bankruptcy in December with $10.6 million in reported assets after being hit with a $148 million defamation judgment for falsely accusing two Georgia election workers of tampering with 2020 election ballots.

The case was punctuated by ongoing disputes over Giuliani’s lack of financial transparency and failures to meet subpoena demands.

Referring to Giuliani as a “recalcitrant debtor,” Lane said in his July 12 ruling that dismissal would be in his creditors’ best interests.

Giuliani is represented by Berger, Fischoff, Shumer, Wexler & Goodman LLP.

The case is In re Giuliani, Bankr. S.D.N.Y., No. 23-12055, order issued 7/25/24.