Rudy Giuliani (left) arrives to address reporters in New Hampshire (AP Photo/Charles Krupa), (right) Shaye Moss testifies as her mother Ruby Freeman listens at right during a Jan. 6 Committee hearing (AP Photo/Jacquelyn Martin).
Ahead of a Wednesday hearing on Rudy Giuliani’s attempt to convert his Chapter 11 bankruptcy reorganization case to a Chapter 7 liquidation of his assets, the 2020 election workers in Georgia that Giuliani was found liable by default for defaming, leading to a $148 million dollar penalty, are asking a judge to throw out the former NYC mayor’s case, citing his “bad faith.”
In an objection filed Monday, distinct from but related to an objection submitted by creditors Dominion Voting Systems, Giuliani sexual assault accuser Noelle Dunphy, and defamed election worker Shaye Moss, a lawyer for Moss’ mother Ruby Freeman asked U.S. Bankruptcy Judge Sean Lane to put an end to the “brazen” legal maneuvering of the debtor.
Notably, the Freeman objection was also submitted on Moss’ behalf by attorney Rachel Strickland.
At a hearing last week, Strickland previewed the arguments she has since filed in the objection. The lawyer told the judge that Giuliani seemed to have “conveniently” timed the motion to convert the case to Chapter 7 as he faced a motion to compel discovery and threats of sanctions.
Strickland said she believed Giuliani’s move was little more than an attempt to “sideline” creditors’ investigation into his finances and to perpetuate delay.
“We are going to be asking for dismissal of these cases,” Strickland stated, and now she has done so, calling Giuliani’s motion to convert a “brazen pleading” that should lead to the dismissal of the Chapter 11 case with prejudice, so it can’t be filed again.
“The best explanation for this sudden about-face is litigation gamesmanship. Successfully converting this case would result in the dissolution of the Committee, end the Committee’s growing investigation into Mr. Giuliani’s assets, and the related near-term threat of discovery sanctions,” the objection said. “A chapter 7 trustee will not be up to speed compared to the Committee and its advisors, who have now spent months getting familiar with the facts of this case. As such, conversion would merely reward atrocious behavior.”
More Law&Crime coverage: Rudy Giuliani’s creditors oppose late-game effort to convert bankruptcy case as ‘one last thinly-veiled attempt to game the system’
Freeman’s attorney agreed with the Official Committee of Unsecured Creditors’ description of Giuliani’s conduct, saying that he has treated bankruptcy as a “joke. The filing also added in a lengthy recounting of the debtor’s alleged “bad faith” behavior, claiming it has “essentially mirrored his strategy” in the defamation case:
While the Freeman Plaintiffs previously joined the Committee’s request for the appointment of a chapter 11 trustee, Rudolph Giuliani’s bad faith now warrants dismissal of this case. For over six months, the Freeman Plaintiffs have waited patiently as Mr.Giuliani has abused the chapter 11 process by pursuing a self-serving, delay-oriented strategy. By now, the Court is familiar with the examples of Mr. Giuliani’s bad faith conduct towards his creditors: the late, inaccurate, and incomplete financial disclosures; the refusal to cooperate with the Committee’s discovery requests; the unending, wasteful, and abusive efforts to appeal the Freeman Judgment; the post-petition statements about the Freeman Plaintiffs giving rise to administrative expense claims; the unauthorized payments to friends and non-debtor businesses; the use of (and sometimes payments to) professionals that have not been retained in the chapter 11 case; the failure to report post-petition income; and the complete lack of progress after six months in bankruptcy. Now there is a new addition to that list: the Conversion Motion.
“Enough is enough,” the filing said.
Strickland urged the judge not to convert the case to Chapter 7 and to instead dismiss the Chapter 11 case with prejudice.
While Giuliani’s attorney has argued that his client has an “absolute right” to convert the case, Strickland countered that decision is up to the judge following an analysis of “whether alternative remedies are in the best interest of creditors and the estate.”
“The Court should conclude that Mr. Giuliani cannot abuse the civil justice system any longer,” the objection added.
Read the objection here.
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