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Rudy Giuliani's apparent stonewalling in his bankruptcy proceedings has not only drawn the ire of creditors but also a judge, and even a Justice Department watchdog. The latter said on Monday that the government may dismiss or convert his case in a move that would hurt his ability to seek protection over his assets.
Creditors had previously asked the bankruptcy judge to appoint an independent trustee to manage Giuliani’s finances, saying he “has shown his preference for delay, diversion and theatrics over progress, rehabilitation and maximization of value for his creditors.”
U.S. Bankruptcy Judge Sean Lane did not rule on the request on Monday, but at the end of the hourslong hearing said, “There are reasons to be very concerned here.”
Andrea Schwartz, a representative with the U.S. Trustee’s office, which is a part of the Justice Department that oversees bankruptcy cases, cited the issues raised and said the government is “close to filing a motion to dismiss or convert the case.”
Giuliani’s bankruptcy proceedings have been all over the map. He has repeatedly failed to submit timely and complete filings. Creditors have accused him of hiding his assets and entering business deals in which income is paid to his businesses, not his estate. According to The New York Times:
Mr. Giuliani’s reports to the bankruptcy court about his spending have been incomplete and confusing. He has at times said his only sources of income were Social Security benefits and his radio show and podcast, but none of his monthly reports show any compensation. He reports spending more than he earns, and his reported cash balances at the end of one month often conflict with those at the beginning of the next month.
Giuliani filed for bankruptcy in December after being ordered to pay a $148 million judgment to two Georgia election workers whom he defamed over lies he spread about the 2020 election. The move meant that the election workers, Ruby Freeman and Wandrea “Shaye” Moss, could not immediately begin collecting the money he owed them.
But Giuliani has continued to accuse the two women of engaging in election fraud, a tactic that his creditors have said is "his only goal for this [bankruptcy] case — re-litigating the Freeman Judgment."