Rudy Giuliani has reached a last-minute agreement to exit personal bankruptcy proceedings and pay about $400,000 to financial advisers hired by creditors, avoiding a sweeping investigation into the former New York mayor’s finances that a federal judge had threatened.
The agreement was filed Wednesday in federal court in White Plains, New York.
This came nearly three weeks after a judge there dismissed Giuliani’s bankruptcy filing, finding that he had repeatedly failed to disclose his sources of income and comply with court orders.
But after Judge Sean Lane dismissed the bankruptcy case, Giuliani’s lawyers argued that he didn’t have the funds to pay his creditors’ court financial advisers, as required by bankruptcy law, the judge said.
That’s why Mr Lane last week ordered all parties to submit proposals by noon on Wednesday on how to end the litigation and prepare for evidentiary hearings about Mr Giuliani’s finances if no agreement is reached.
The judge must sign the agreement, which is submitted less than three hours before the deadline.
The creditors include former Georgia election staffers Ruby Freeman and Wondrea “Shay” Moss, who won $148 million in defamation damages after Giuliani filed allegations of voter fraud in connection with the 2020 election.
Freeman and Moss said Giuliani had spread Donald Trump’s lies that the election was stolen, which led to death threats and made them fear for their lives.
Under the agreement filed Wednesday, Mr. Giuliani will give his lawyers $100,000 to cover payments to the creditors’ financial adviser, New York-based Global Data Risk, and the remaining expenses will be paid from the proceeds of the sale of his New York City apartment or Florida condominium, estimated to be worth $5.6 million and $3.5 million, respectively, according to court documents.
Under the agreement, Global Data Risk is also permitted to place liens on properties in New York City and Florida to ensure that Giuliani pays all of his fees.
In a court filing earlier this month, lawyer Rachel Strickland of the law firm Freeman & Moss said Global Data Risks had recorded expenses of $400,000 during the bankruptcy proceedings.
Bankruptcy lawyers for Strickland and Giuliani did not immediately respond to messages seeking comment Wednesday.
Lane said he was “concerned” that Giuliani was saying he couldn’t pay Global Data Risk.
“Even if we assume that the Debtors do not have the funds to immediately pay the bankruptcy costs, they certainly have substantial assets available to pay such costs,” Judge Lane wrote in his July 25 order.
Meanwhile, Freeman and Moss won a lawsuit in federal court in Washington, DC, allowing them to seek enforcement and payment of the $148 million judgment.
The bankruptcy has halted collection efforts.
The bankruptcy was one of numerous legal woes plaguing Giuliani, 80, a former federal prosecutor and 2008 Republican presidential candidate who was hailed as “America’s mayor” for his calm, steady leadership after the Sept. 11, 2001, terrorist attacks.
He was recently disbarred from practicing law in New York state after a court found he had repeatedly made false statements about Trump’s loss in the 2020 presidential election.
He also faces the possibility of losing his license to practice law in Washington after the commission in May. It was recommended that he be disbarred.
Giuliani faces criminal charges in Georgia and Arizona for his role in efforts to overturn the results of the 2020 election.
He pleaded not guilty in both cases.
In his bankruptcy filing, Giuliani listed about $153 million in existing and potential liabilities, including about $1 million in unpaid state and federal taxes, money owed to attorneys and potentially millions of dollars in judgments in lawsuits.
He estimated his assets were worth between $1 million and $10 million.
According to a recent financial report in the bankruptcy case, he had about $94,000 in cash as of the end of May, and his company, Giuliani Communications, had about $237,000 in a bank account.
Giuliani’s main source of income over the past two years has been his retirement accounts, which had a balance of just over $1 million in May but fell to about $2.5 million in 2022 after withdrawals, according to the filing.
