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Rudy Giuliani’s never-ending bankruptcy case continues — and the former mayor may now may have to testify in court about the finances he’s been so cagey about.
Earlier this month, Judge Sean Lane threw out the broke ex-mayor’s Chapter 11 bankruptcy case, but Giuliani and his creditors have not reached a resolution on the terms of the dismissal, as he’s refused to pay administrative expenses incurred during the case, despite it being a legal requirement for dismissal.
While Giuliani’s lawyers have contended that he does not have the cash to pay the fees in question, a lawyer for two defamed election workers — who are owed $148 million by Giuliani — argued that she has no idea how much money Giuliani actually has because he hasn’t been “remotely forthcoming.”
On Thursday, Lane ordered the parties in the case to submit filings to “provide their views on the most appropriate path forward.” Those filings are due July 31.
Since there is “no resolution on the horizon,” Lane wrote, he believes the “most obvious path forward is to initiate proceedings to assess the details of the Debtor’s current financial circumstances” in order to craft an order that ensures the administrative fees are paid.
The judge noted that this path “will inevitably include disclosure of documents and might include testimony under oath by the Debtor.”
However, the judge took Giuliani’s history of not being transparent into account in his order.
“Of course, this path might mirror in some ways the unsuccessful efforts at financial transparency that have plagued the case to date,” Lane wrote. “Nonetheless, the Court’s intention would be to complete such a task expeditiously and efficiently, with the most direct course likely being an evidentiary hearing before the Court.”
He also left open the possibility that the court may have to walk back on its dismissal “because the Debtor is unwilling to pay these administrative expenses, a necessary requirement under the law for dismissal of the case.”
“What little we know about the Debtor’s financial situation makes his stance here more troubling,” Lane wrote in his Thursday order. “Even assuming that the Debtor does not have the funds on hand to immediately pay these bankruptcy expenses, he certainly has considerable assets upon which he can draw to pay such expenses. It is undisputed that he owns two apartments of considerable value.”
Giuliani’s New York City condo, which has been up for sale on and off throughout the year, is valued at around $5.6 million, while his Florida condo is valued at about $3.5 million. The former mayor’s lawyer previously argued against their client selling both of his places, claiming that it would result in Giuliani “join[ing] the ranks of the homeless.”
Throughout the case, the creditors’ committee have groaned about “deficiencies in his financial reporting and disclosures,” including discrepancies on payments related to his Florida condo, “unauthorized payments” to his alleged “girlfriend,” and his failure to comply with discovery requests.
The court may ultimately have to reevaluate the appointment of a Chapter 11 trustee to take control of his finances, a move that the creditors’ committee had been advocating for, the judge warned.
Thursday’s order comes a week after Giuliani’s bank statement revealed he blew through $30,000 in a seven-day period. Much of that cash went toward expenses for his two condos, while an unknown amount was spent on marketing firms, payments to Amazon and Apple, as well as expenses in Milwaukee, where he took a tumble at the Republican National Convention.
Giuliani’s lawyers admitted in a filing that the former mayor flew first-class to Milwaukee — but explained he didn’t pay for it. Instead, the president of FrankSpeech, MyPillow CEO Mike Lindell’s broadcasting platform that has a new show hosted by Giuliani, said his company “entirely covered” for the former mayor’s luxury seats and lodging from July 14 through the 20.
