Rudolph Giuliani’s creditors are vowing to conduct a thorough investigation into the former New York City mayor’s financial transactions in the period leading up to his bankruptcy filing.
Giuliani submitted his bankruptcy petition in December in an attempt to halt debt collections while he seeks to modify or appeal a $148 million defamation judgment related to his efforts to keep former President Donald Trump in the White House.
There are lingering questions about any transfers Giuliani may have made in the 90 days prior to his bankruptcy, according to Philip C. Dublin of Akin Gump Strauss Hauer & Feld, who represents a committee of Giuliani’s unsecured creditors. Dublin made these statements at a status hearing in the US Bankruptcy Court for the Southern District of New York on Wednesday. He also noted that disclosures related to any transfers have not yet been filed.
However, Heath Berger of Berger Fischoff Shumer Wexler & Goodman LLP, representing Giuliani, objected at the hearing, stating that there is no significant amount of assets for the creditors to discover.
Additionally, Dublin said that the committee has concerns about potentially “significant” overstatements and understatements of the value of Giuliani’s assets, and plans to request the court to hire a forensic accounting firm to aid in the investigation of Giuliani’s finances. There is also doubt whether Giuliani’s debts can be discharged through bankruptcy.
“Whether there’s a pot of gold here remains to be seen,” Dublin said.
Giuliani filed for Chapter 11 bankruptcy after a judgment allowed Georgia poll workers Ruby Freeman and her daughter, Shaye Moss, to immediately pursue his assets. The workers were previously awarded $148 million in damages after Giuliani falsely accused them of election fraud. Giuliani has criticized the judgment and claimed that it does not reflect the true damages suffered by the workers.
Potential Red Flags
Red flags have also been raised regarding the financing of one of Giuliani’s third-party litigation defense funds, whose president is his son Andrew Giuliani, Freeman and Moss’s attorney, Rachel C. Strickland of Willkie Farr & Gallagher LLP, informed the court.
Strickland expressed concern about a collective $70,000 payment to the funds and questioned the source of the funds and the origin of the money.
“The issue of the source of funds is going to be very ripe,” Strickland said.
In recent financial disclosures, Giuliani stated that he has roughly $10.6 million in assets against nearly $153 million in liabilities. His attorney has indicated that Giuliani plans to seek court permission to sell his Manhattan condominium, which is valued at about $5.6 million, and revealed that the former mayor has mainly relied on retirement benefits in recent years.
The unsecured creditors committee is represented by Akin Gump Strauss Hauer & Feld, and Giuliani is represented by Berger Fischoff Shumer Wexler & Goodman LLP.
The case is Rudolph W. Giuliani, Bankr. S.D.N.Y., No. 23-12055, hearing 1/31/24.