A bankruptcy judge should appoint a trustee to immediately take control of Rudy Giuliani’s financial affairs after the former mayor repeatedly lied and deceived creditors about his finances, lawyers for the creditors said in a Tuesday court filing.
Among other things, the lawyers said Giuliani was funneling money into his businesses to avoid it going to creditors, undervalued his jewellery, and refused to disclose what several Apple and Amazon purchases were for. Giuliani filed for bankruptcy in December, shortly after a jury in Washington DC ordered him to pay $148.1m in damages to Ruby Freeman and Shaye Moss – two Atlanta, Georgia, election workers he spread lies about after the 2020 election.
“Over and over again, the Debtor has shown his preference for delay, diversion and theatrics over progress, rehabilitation and maximization of value for his creditors. His creditors do not need to accept this as their plight,” lawyers for creditors wrote. “Accordingly, the time has come for the immediate appointment of a chapter 11 trustee to take control of the Debtor’s assets and financial affairs, including his wholly-owned businesses.”
Ted Goodman, a Giuliani spokesperson, did not respond to a text message seeking comment.
The lawyers representing creditors said they only became aware of Giuliani’s deal to promote a coffee brand through press reports earlier this month.
Giuliani receives 80% of the net proceeds of the sale of each bag, which is paid to Giuliani Communications, an LLC he owns, according to the contract. That arrangement was intentional, they said, to ensure that profits from the deal did not go to creditors.
“These facts suggest that Mr Giuliani, a debtor in a chapter 11 case with more than $148 million of claims against him, is working for free to the detriment of his creditors, which in itself is problematic, and/or funneling funds that belong to his creditors to his business and using his business as a personal piggy bank, which is fraudulent,” they wrote.
“The former mayor of New York City, a former United States Associate Attorney General and a former United States Attorney for the Southern District of New York, can and should find a paying job that will help fund distributions to his creditors instead of kickbacks to his cronies and a personal slush fund.”
Reviewing Giuliani’s credit card statements, they said, it was clear he had personally paid “to cover the travel and lodging expenses of his close associates and employees of his business”. They also said he paid the expenses of Maria Ryan, his girlfriend. In an email disclosed as part of the filing, Giuliani’s lawyers said Giuliani had reimbursed for expenses paid on his behalf. “The debtor will NOT be paying anyone else’s cards,” Heath Berger, a Giuliani attorney, wrote in the email.
Among his assets, Giuliani also listed a collection of several luxury watches and three New York Yankees world series rings as having a total value of $30,000. The creditors accused him of deliberately deflating the value of the items, citing a single Yankees world series ring that auctioned for more than $29,000. They also said he refused to sell his Palm Beach home and failed to disclose his ongoing membership at the Palm Beach Yacht Club.
“Regardless of whether Mr Giuliani is actually a member of this club (and it appears he is), his behavior is being perceived by the Committee and his creditors as dishonest. Because, while his creditors are told to sit on their hands, Mr Giuliani opts to ignore his obligations as a debtor in possession and instead, kick back at the Palm Beach Yacht Club,” the attorneys wrote.
Giuliani has also filed several spending disclosures late with the court and failed to provide information on a “troubling quantity of Amazon and Apple transactions”, lawyers said. His January spending disclosure, for example, included “at least 60 Amazon transactions” and the creditors attorneys said they have no idea what they are for.
“The Committee will now need to investigate whether the Debtor is liable for bankruptcy crimes through the use of his businesses to divert resources away from his estate and creditors in connection with his purported income that he allegedly never personally received,” lawyers wrote.
Giuliani has pled not guilty in separate criminal cases dealing with his efforts to overturn the election in Arizona and Georgia.
Source: US Politics - theguardian.com
