Former New York City Mayor and Trump ally Rudy Giuliani is facing growing pressure from creditors who accuse him of covering up his assets, his unknown earnings from a coffee deal, and reckless spending.
Giuliani filed for bankruptcy protection after a $148 million defamation verdict against him by two Georgia election workers, and now creditors will step into court in the hope they can convince a judge to let a third party handle his assets.
“Simply put, Mr. Giuliani and his bankruptcy case have reached an impasse,” the unsecured creditors committee wrote. Giuliani’s bankruptcy halted the Georgia election workers’ $148 million award, and Chapter 11 bankruptcy enabled him to remain in control of his assets.
The creditors believe it’s a delay tactic, and the election workers who won the case say federal law prevents Giuliani from using bankruptcy to rid himself of his debt to them. Giuliani’s representation believes it’s an effort to “bully” him.
“These incessant court filings are part of a larger effort to bully the mayor into silence through lawfare and a public smear campaign,” Ted Goodman, an adviser to Giuliani, said in a statement. “Mayor Rudy Giuliani—one of America’s most effective federal prosecutors in history—won’t be bullied into capitulation by a concerted effort by bad-faith actors to silence the mayor and anyone else willing to take on the permanent Washington political class.”
U.S. Bankruptcy Judge Sean Lane, who oversees Giuliani’s bankruptcy case, expressed frustration at a hearing last month.
“I am disturbed about the status of this case. The question is, as it always is in bankruptcy court, where do we go from here?” Lane said.
If the judge agrees to let a trustee handle Giuliani’s finances, they could sell his assets or prevent Giuliani from directing them elsewhere. Among those assets are the profits Giuliani is set to receive from a venture called “Rudy Coffee,” in which he will reportedly receive 80% of the net profits.
“His creditors do not need to accept this as their plight, and the Committee refuses to do so. Accordingly, the time has come for the immediate appointment of a chapter 11 trustee to take control of the Debtor’s assets and financial affairs, including his wholly-owned businesses,” the motion reads.
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Giuliani previously proposed a $43,000 per month budget in federal bankruptcy court but spent significantly over that in another bankruptcy filing, showing he spent nearly $120,000 in January alone. He hasn’t put to rest those concerns, with credit card statements showing he paid his girlfriend’s credit card bill and cover the costs for his businesses.
That overspending has lent credence to creditors arguments and turned up the heat on Giuliani, who is also facing criminal charges in Arizona for his role in an alleged fake electors scheme.