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A judge has dismissed Rudy Giuliani's bankruptcy case, nearly seven months after the disgraced lawyer filed for Chapter 11 protection.
In a decision on Friday, U.S. Bankruptcy Judge Sean Lane cited a list of factors to support the dismissal, including that remaining in Chapter 11 would “erode much, if not all, of the value of the estate” due to Giuliani’s lack of cooperation, which he noted is unlikely to change if a trustee were appointed. Lane also cited Giuliani’s outstanding lawsuits with most of the creditors, writing that those cases are “better resolved outside the bankruptcy forum.”
The dismissal of Giuliani's case does not absolve him of his debts, and his creditors can now go after his assets to try to recover some of the money they're owed. It also means that Ruby Freeman and Shaye Moss, the Georgia election workers whom he defamed after the 2020 election and whom he was ordered to pay nearly $150 million, can begin to collect on that sum. Proceedings can also resume in other lawsuits that have been on hold since Giuliani declared bankruptcy, including defamation suits by two voting machine companies and a sexual harassment claim from a former employee (a representative for Giuliani said it was a "consensual relationship").
The former lawyer for Donald Trump is also barred from filing for bankruptcy again in the next 12 months to provide his creditors with time to enforce their judgments or pursue lawsuits.
Giuliani filed for bankruptcy in December after the judgment in Freeman and Moss’ defamation case was handed down, and bankruptcy protection prevented them from immediately collecting the money. (Giuliani’s appeal in that case can move forward now that his bankruptcy proceedings have ended.)
But his bankruptcy case did not go smoothly. Giuliani’s creditors accused him of using bankruptcy to avoid paying the money he owes and expressed deep frustration at what they characterized as attempts to obfuscate his assets. Giuliani also filed reports to the court about his spending and earnings that The New York Times described as "incomplete and confusing."
At a hearing on Wednesday, Giuliani erupted at the accusations of fraud, calling them “highly defamatory.” His lawyer Gary Fischoff told the judge that his client “would not commit any bankruptcy fraud.”
In his decision, Lane criticized Giuliani’s conduct in the case, which he said hindered the bankruptcy process. “The record in this case reflects Mr. Giuliani’s continued failure to meet his reporting obligations and provide the financial transparency required of a debtor in possession,” he wrote.
In a contentious hearing earlier this week, Lane had indicated that he was inclined to dismiss the case. Giuliani’s creditors had been seeking the appointment of a Chapter 11 trustee to control his assets, but Moss and Freeman — the only creditors who have a judgment in their civil lawsuits against Giuliani — split from the group and asked the case to be thrown out. And although Giuliani initially requested that his case be converted to Chapter 7 so that his assets could be liquidated, his lawyers earlier this week agreed with Freeman and Moss to dismiss the case.