Rudy Giuliani bankruptcy shows Trump ally drowning in debt

Rudy Giuliani bankruptcy shows Trump ally drowning in debt
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Rudy Giuliani’s bankruptcy filing, spurred by a multimillion-dollar verdict against him for defaming two Georgia election workers, has provided fresh insight into the former New York City mayor’s finances.

A federal jury in Washington, D.C., in December ordered Giuliani to pay Ruby Freeman and Shaye Moss a whopping $148 million for baselessly claiming they engaged in widespread voter fraud after the 2020 election. Days later, he filed for bankruptcy, acknowledging the severe strain the penalty put on his finances.

His bankruptcy judge late Tuesday allowed the longtime ally of former President Trump to appeal the defamation verdict, but in the meantime, his bankruptcy proceeding has cracked Giuliani’s finances wide open, shedding light on his debts and overall standing.

That standing includes thousands of dollars in taxes and credit card debt and millions more he could owe to voting technology companies Dominion Voting Systems and Smartmatic if he’s found to have defamed them, too.

Here’s what we’ve learned about Giuliani’s finances amid his bankruptcy.

A who’s who of creditors

In addition to Freeman and Moss, the creditors with the largest unsecured claims against Giuliani include banks, lawyers, government tax agencies, golf clubs and other entities.

Giuliani owes more than $900,000 in taxes, most of which are federal taxes.

Between two golf clubs in West Palm Beach, Fla. — including the former president’s Trump International Golf Club — Giuliani owes nearly $40,000 in unpaid membership fees, though he disputes a large chunk of that amount.

He could also owe millions of dollars in unresolved lawsuits, court filings show.

A New York man, Daniel Gill, sued Giuliani for $2 million after he was charged with assault for slapping the ex-mayor on the back and asking, “What’s up, scumbag?” The law firm Davidoff, Hutcher & Citron, lodged by Giuliani’s longtime lawyer Robert Costello in September over unpaid legal fees, is claiming $1.36 million. And the law firm Aidala, Bertuna & Kamins, which Giuliani hired after his apartment was raided by the FBI, is seeking more than $387,000.

On top of all that, several lawsuits seek “unknown” claims, including from Dominion, Smartmatic, the president’s son, Hunter Biden, and Noelle Dunphy, who accused Giuliani of sexual assault and harassment.

Giuliani’s bankruptcy case is still in its early stages, however.

The $148 million verdict suddenly precipitated Giuliani’s Chapter 11 petition, meaning his bankruptcy began without any organized creditor group.

Later, Moss, Dominion and Dunphy teamed up to represent the unsecured creditors in the proceedings moving forward.

Giuliani now has a time window to propose a plan of reorganization that will lay out how he plans to compensate his creditors and eventually emerge from bankruptcy. Gary Fischoff, one of Giuliani’s bankruptcy lawyers, told The Hill it’s “still too early to know” when a plan will be filed.

Giuliani: Trump campaign, RNC owe legal bills

At a hearing earlier this month, Giuliani claimed he was shortchanged some $2 million in legal fees for his work on Trump’s 2020 presidential campaign.

The money is owed by both the campaign and the Republican National Committee (RNC), not the former president himself, Giuliani told creditors and the Justice Department’s bankruptcy oversight arm during a Feb. 7 hearing, according to Bloomberg Law.

“Once I took over, it was my understanding that I would be paid by the campaign for my legal work and my expenses to be paid,” he said, according to the Independent. “When we submitted the invoice for payment, they just paid the expenses. Not all, but most. They never paid the legal fees.”

Court filings list the potential claim’s amount as “undetermined” and against “Donald J. Trump.”

The fees are a result of Giuliani “taking over” Trump’s campaign legal staff in November 2020 at the former president’s request, Giuliani told the creditors and the office of the U.S. Trustee. At that time, Trump’s campaign lawyers were launching a legal effort to overturn election results in battleground states to favor Trump.

The Trump campaign and the RNC did not return requests for comment.

Outside groups paying legal fees

As Giuliani appeared to face a cash crunch even before his bankruptcy, questions had swirled as to how the former New York City mayor was paying attorney Joseph Sibley to represent him in the Georgia election workers’ defamation case and another lawsuit.

The bankruptcy provided new details about the arrangement, showing how two outside entities have financially backed most of Giuliani’s defense.

In a sworn declaration Friday, Sibley said Giuliani himself had only coughed up $30,000.

The remainder — $548,000 — came from two other entities. Sibley indicated he was paid $260,000 from the political action committee Giuliani Defense, which campaign finance records show was organized last year by the former mayor’s son, Andrew Giuliani.

The group appears to have received much of its financial backing through a $100,000-per-plate fundraiser Trump hosted at his Bedminster, N.J., golf club for Giuliani. The same day, Giuliani Defense took in more than a half-million in high-dollar donations, the records show, including from Elizabeth Ailes, the widow of former Fox News chair Roger Ailes.

The Rudy Giuliani Freedom Fund sent about $288,000, Sibley said. That group, run by longtime Giuliani aide Jake Menges, accepts donations from the public online.

Menges did not identify any donors but wrote in court papers that they “number in the hundreds.” Most contributions amount to less than $100, but the fund also received some larger donations, Menges said, including one for $25,000 and another for $10,000.

Giuliani told his bankruptcy judge Monday that he hadn’t contributed to the fund, only to amend his filing hours later to indicate he did once assign $10.

‘Have his cake and eat it too’

The details about Giuliani’s legal bills spilled out as part of the former mayor’s fight to immediately seek a new trial and file a notice of appeal in his defamation case.

By filing for bankruptcy, Giuliani had automatically frozen the case and his other various civil lawsuits. His criminal case in Georgia, where he faces racketeering charges alongside Trump, is unaffected, however.

Freeman and Moss raised concerns that, if Giuliani can keep litigating the case even as he remains in bankruptcy, Sibley, the attorney who represented him in that case, could end up becoming a creditor and seek to take money out of the pot that would otherwise go to the mother-daughter duo and others

“[I]t is the height of irony that the first substantive relief sought by Mr. Giuliani in his chapter 11 case—to be heard on an expedited basis no less—is a motion to lift the automatic stay so that he can pursue an appeal in the Freeman Litigation,” the election workers’ attorneys wrote in their objection.

“Through this motion, Mr. Giuliani is looking to have his cake and eat it too: he wants to appeal the Freeman Litigation, not post a bond, and use the automatic stay to bar Ms. Freeman and Ms. Moss from enforcing their judgment.”

Giuliani’s bankruptcy judge approved his motion Tuesday after both Giuliani and Sibley assured the court that the attorney wouldn’t seek any funds out of the pot. Instead, Sibley said he agreed to be paid a $50,000 flat fee, plus out-of-pocket costs, to handle the appeal, which will be supplied by the two outside groups.

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