By Dietrich Knauth
NEW YORK (Reuters) – Former Trump lawyer Rudy Giuliani will ask a U.S. judge on Wednesday to convert his personal bankruptcy case into a Chapter 7 liquidation and appoint a trustee to sell off his assets, a move that his creditors oppose as a delay tactic.
Giuliani’s creditors, including two former Georgia election workers who won a $148 million defamation judgment against him, have said that Giuliani’s motion to appoint a Chapter 7 trustee was primarily meant to thwart their ongoing investigation into the former New York mayor’s finances.
Wednesday’s court hearing will likely lead to some loss of control for Giuliani, even if the judge allows his preferred method for liquidating his assets.
The creditors committee accused Giuliani of pretending to be an “elderly, doddering man” while he defies court orders, continues his free-spending ways, and ducks his financial disclosure obligations.
The former Georgia election workers, Wandrea “Shaye” Moss and her mother Ruby Freeman argued that the former New York mayor should instead be kicked out of bankruptcy so they can try to collect legal judgments against him in other courts.
Giuliani filed his bankruptcy in New York as a Chapter 11 case, which allows him to retain control over his finances and try to work out a settlement with creditors. But Chapter 11 also requires him keep the court informed about his spending and to pay for some of his creditors’ legal fees.
Converting his case to Chapter 7 would result in a more straightforward liquidation of his assets, and it would also disband a court-appointed committee that represents his creditors’ interests.
Giuliani’s creditors said that Giuliani had recently fought the appointment of a trustee, and his “sudden about-face” suggested that he was trying to disrupt the committee and its ongoing investigation into his finances. A Chapter 7 trustee would have to re-start that investigation from scratch, and “will not act with the same resolve” to hold Giuliani accountable, the creditors said.
Giuliani filed for bankruptcy protection in December after a Washington, D.C. court ordered him to pay $148 million to two Georgia election workers that he falsely accused of rigging votes in the 2020 election. Giuliani is facing criminal charges in Georgia and Arizona for aiding former president Donald Trump’s efforts to subvert the 2020 election results, and his false claims about the election have caused him to lose his license to practice law in New York.
(Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi)
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