Giuliani seeks bankruptcy after $148 million judgment in defamation case

[December 22, 2023]  By Luc Cohen and Dietrich Knauth

NEW YORK (Reuters) -Rudy Giuliani filed for bankruptcy on Thursday, just days after he was ordered to pay $148 million to two former Georgia election workers he falsely accused of fraud following Donald Trump's 2020 presidential election loss.

Guiliani, who was known as "America's mayor" for his leadership of New York after the Sept. 11, 2001, attacks, faces a crush of debts stemming from his work as a lawyer on former President Trump's behalf. He also faces criminal charges in Georgia.

In a filing in U.S. Bankruptcy Court in New York, Giuliani said he had between $100 million and $500 million in liabilities and $1 million to $10 million in assets.

A spokesperson for Giuliani, who no longer works as Trump's lawyer, said the bankruptcy filing will give him time to appeal the $148 million penalty and ensure that other creditors are treated fairly.

"No person could have reasonably believed that Mayor Rudy Giuliani would be able to pay such a high punitive amount," spokesperson Ted Goodman said.

U.S. bankruptcy proceedings can enable people and companies to wipe away or reorganize their debts, and Giuliani's filing will pause all of the pending civil lawsuits against him.

However, it may not allow him to duck the money he owes the election workers, as judges have ruled that defamation penalties cannot be discharged if a debtor has engaged in "willful and malicious" conduct.

The two former election workers, Wandrea "Shaye" Moss and her mother Ruby Freeman, faced a deluge of threats after Giuliani falsely claimed they were engaged in voting fraud.

Giuliani has repeated those claims following the Dec. 15 verdict even though he has admitted in court that they were defamatory, prompting the two workers to file a second lawsuit.

A federal judge on Wednesday ruled that Giuliani must immediately begin paying the two women, concluding there was a risk he may attempt to conceal his assets. A lawyer for the two women said bankruptcy would not discharge his debt to them.

Giuliani was named Time magazine's Person of the Year following the 2001 attacks, and he mounted an unsuccessful bid for the 2008 Republican presidential nomination.

As Trump's personal lawyer, he led efforts to keep Trump in the White House following his 2020 defeat, filing unsuccessful lawsuits to challenge the results and falsely claiming in public testimony that he had evidence proving election fraud.

Former New York Mayor Rudy Giuliani arrives for his defamation lawsuit at the U.S. District Courthouse in Washington, U.S., December 15, 2023. The case was brought by two Fulton County, Georgia election workers after they were harassed following Giuliani's false election claims. REUTERS/Bonnie Cash/ File Photo

His seat-of-the-pants effort often drew ridicule. He scheduled a press conference at a "Four Seasons" in Philadelphia that turned out to be a landscaping company, not a luxury hotel. At another news conference, a dark substance, possibly hair dye, dripped down his face.

He called for "trial by combat" at a rally for Trump supporters on Jan. 6, 2021, shortly before thousands of them attacked the U.S. Capitol in an effort to prevent Congress from certifying Trump's defeat.

Giuliani faces criminal charges of election subversion in Georgia, along with Trump and more than a dozen other co-defendants. He has pleaded not guilty.

His law license has been suspended in New York and he faces disbarment in Washington.

Giuliani listed President Joe Biden's son, Hunter Biden, and a former employee, Noelle Dunphy, as creditors on the bankruptcy filing.

Hunter Biden has sued Giuliani for violating his privacy over data allegedly taken from his laptop, while Dunphy has sued him for sexual assault, harassment and wage theft. Giuliani has denied the allegations.

Dunphy's lawyer Justin Kelton said they would not be deterred from pursuing the case.

Other creditors include Smartmatic and an employee of Dominion Voting Systems. He faces lawsuits for claiming both voting-machine companies flipped votes from Trump to Biden in the 2020 election.

The two companies did not immediately respond to requests for comment.

Giuliani also said he owed nearly $1 million to the U.S. and New York state governments and nearly $2 million in legal fees.

Two law firms that formerly represented him have sued for unpaid bills.

(Reporting by Luc Cohen and Dietrich Knauth in New York, Andrew Goudsward and Susan Heavey in Washingtion; writing Andy Sullivan; editing by Rami Ayyub, Noeleen Walder and Jonathan Oatis)

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