By Dietrich Knauth
NEW YORK (Reuters) – A U.S. judge said Thursday he may reverse course by ending Rudy Giulianibankruptcy and instead maintain donald trumpof the former attorney under Chapter 11 supervision until he pays about $350,000 in fees owed to his creditors.
U.S. Bankruptcy Judge Sean Lane ruled on July 12 that Giuliani should be thrown out of bankruptcy for failing to make required financial disclosures. But the ruling did not take effect immediately, and Lane said in a court order Thursday that he was having second thoughts over the former New York City mayor’s refusal to reimburse creditors who hired investigative accountants to fill gaps in his financial reports. .
Closing the bankruptcy without taking care of these fees would essentially reward Giuliani for failing to make the required financial disclosures, according to Lane.
“There may come a time when dismissal is no longer an option,” Lane wrote.
Giuliani, 80, filed for bankruptcy protection in December after a Washington, D.C., court ordered him to pay $148 million to two Georgia election officials he falsely accused of rigging votes in the 2020 presidential election. won by Democrat Joe Biden.
There is no doubt that Giuliani owes the fees or has the ability to pay them — Giuliani’s apartments in New York and Florida are worth approximately $9 million, Lane wrote. Giuliani “simply refused” to pay them, according to Lane.
Lane ordered Giuliani and his creditors to suggest alternative paths by July 31.
Once exonerated from bankruptcy, Giuliani’s creditors will be free to pursue lawsuits against him for defamation, sexual harassment and other allegations arising from Giuliani’s work for Trump, the former Republican president, as he sought to overturn his election defeat in 2020.
Despite the legal risks, Giuliani told Lane he preferred to end the bankruptcy rather than continue under the more onerous court supervision proposed by his creditors. A committee appointed to represent Giuliani’s creditors asked Lane to appoint a bankruptcy trustee to take over Giuliani’s finances and business affairs.
Giuliani’s most important creditors, former election officials Wandrea “Shaye” and Ruby Freeman, argued in favor of the dismissal, which would allow them to seek payment of their $148 million defamation judgment against Giuliani.
Giuliani’s lawyers said dismissing the case would also free Giuliani to appeal the ruling, which forced him to seek bankruptcy protection.
Lane said Thursday that he would consider appointing a bankruptcy trustee to oversee the sale of Giuliani’s $6.5 million New York apartment and pay late fees with the proceeds from that sale. Lane said he may also require Giuliani to testify under oath about his finances before dismissing the case.
(Reporting by Dietrich Knauth; Editing by Alexia Garamfalvi and Daniel Wallis)
