Rudy Giuliani has filed for bankruptcy after two election workers sued him for defamation and won $148.1m in damages.
One expert said the move would probably not mean Giuliani had a “clean slate over the damages”, though it was likely to make recovering them a “long road” for the election workers, Ruby Freeman and her daughter, Shaye Moss.
Court documents show Giuliani, Donald Trump’s former attorney and former mayor of New York, on Thursday filed for bankruptcy protection in New York’s southern district court.
On Wednesday, a Washington DC judge allowed the two Georgia election workers who successfully sued Giuliani to immediately collect their millions in damages.
“No person could have reasonably believed that Mayor Rudy Giuliani would be able to pay such a high punitive amount,” Giuliani’s political adviser, Ted Goodman, said in a statement. “Chapter 11 will afford Mayor Giuliani the opportunity and time to pursue an appeal, while providing transparency for his finances under the supervision of the bankruptcy court, to ensure all creditors are treated equally and fairly throughout the process.”
The Georgia workers, Freeman and Moss, would typically have to wait 30 days before they can start attempts to collect payments, but Beryl Howell agreed that Giuliani had “proven himself to be an unwilling and uncooperative litigant”.
“Nowhere in opposition does Giuliani promise not to hide assets from plaintiffs,” the district court judge wrote in a court order on Wednesday. “Nor does he contend, let alone demonstrate with documentary or other proof, that he would be unable to satisfy the judgement or in part.”
Freeman and Moss sued Giuliani for making false claims that they tampered with absentee ballots in Atlanta during the 2020 presidential election and were trying to help steal the election for Joe Biden, which the now president won in a crucial victory. In court, they said they received harassment and death threats after Giuliani, who was working for Donald Trump at the time, singled them out, causing severe emotional distress.
After a four-day trial earlier this month, a jury found Giuliani guilty of defamation and ordered him to pay $148.1m to the two women, along with $237,000 in lawyer fees.
In her order, Howell noted that Giuliani and his legal defense team argued that paying for damages is “the civil equivalent of the death penalty” that will be “the end of Mr Giuliani”, yet Giuliani’s lawyers have not responded to requests for evidence of any financial difficulties.
Instead the court had seen, for example, Giuliani hire a spokesperson to attend the trial with him, Howell said.
“Such claims of Giuliani’s ‘financial difficulties’ – no matter how many times repeated or publicly disseminated and duly reported in the media – are difficult to square with the fact that Giuliani affords a spokesperson, who accompanied him daily to the trial,” Howell wrote.
Freeman and Moss’s lawyers have noted that Giuliani has “substantial assets” in New York and Florida, specifically properties that include a condo in Florida and an apartment in a co-op building in New York.
Giuliani in 2019 listed his Palm Beach condominium for $3m before removing it from the market in 2020. In October, the US Internal Revenue Service (IRS) placed the condo under a lien, or a hold, after Giuliani failed to pay nearly $550,000 owed in taxes. Meanwhile, Giuliani listed his co-op in Manhattan’s upscale Upper East Side neighborhood for $6.5m in August.
The lawyers implied that while Giuliani’s assets may only be able to cover “a small portion of Plaintiffs’ judgment”, there is still a high risk that he would try to hide or sell off his assets if the court gave him 30 days before the penalty can be collected.
“There is a substantial risk that Defendant Giuliani will find a way to dissipate those assets before Plaintiffs are able to recover,” the lawyers said in court documents.
In his form filing for bankruptcy, Giuliani indicated that he had between $1m to $10m in assets and between $100m and $500m in liabilities. He also indicated that he had received credit counseling before filing for bankruptcy.
Chapter 11 refers to part of US law covering bankruptcy and typically shelters a company or an individual from its debtors for a time while it reorganizes, with court approval.
Freeman and Moss on Monday filed another lawsuit against Giuliani asking for a court order to bar Giuliani, who has continued to accuse the women of election interference, from spreading more lies about them. Even after the damages trial last week, Giuliani continued to say that he had “evidence in defense” though he did not offer any during the trial.
“I am quite confident when this case gets before a fair tribunal it will be reversed so quickly that it will make your head spin and the absurd number that just came in will help that, actually,” he said after the verdict.
Laurie Levenson, law professor at Loyola Marymount University, told the Guardian that Giuliani’s bankruptcy filing would likely not void the judgment amount.
“The bankruptcy filing will put things on hold. It doesn’t mean necessarily that Giuliani will be able to discharge his debt [or] wipe the slate clean,” Levenson said.
“As the bankruptcy court sorts it out, he still may be on the hook for the $148m judgement,” she added.
Levenson added, though, that it would be a “long road” for Freeman and Moss to get their money. “And, it may be very true that these individuals may not get their money,” Levenson said, adding that others who have sued high-profile figures, like Alex Jones, have not received funds.
But Levenson added that Rudy Giuliani would probably have to give money he makes in the future to Freeman and Moss.
Levenson added that it was “no surprise” that Giuliani has filed for bankruptcy. “Frankly, he doesn’t have the money to pay this judgment and there are more coming,” Levenson said.
