Rudy Giuliani speaks to reporters after Republican presidential candidate former President Donald Trump spoke at a primary election night party in Nashua, N.H., on Tuesday, Jan. 23, 2024. (AP Photo/Matt Rourke)
A federal bankruptcy judge in New York City will allow a group of creditors to perform an extensive forensic accounting of Rudy Giuliani‘s assets, liabilities, conduct and financial position.
In a Friday order by U.S. Bankruptcy Judge Sean Lane, the Official Committee of Unsecured Creditors was given the go-ahead to hire Global Data Risk LLC as a “specialized forensic financial advisor” for the chapter 11 case initiated by Donald Trump’s erstwhile attorney.
Giuliani’s creditors previously made the request in a 32-page application filed in March and a subsequent court hearing held in April.
The three-person creditors group have long harbored concerns about the financial statements filed by the former New York City mayor with the bankruptcy court — and have never been content to take those claims at face value. In January, Giuliani claimed he only had a “net income” of $2,308 per month after over $40,000 in monthly expenses in schedules and a statement of financial affairs.
In the Friday order, Lane determined the hiring of the outside group “is in the best interests of the Debtor’s estate and his unsecured creditors” and overruled any objections previously lodged.
The group now has wide latitude to investigate Giuliani’s finances.
More Law&Crime coverage: Rudy Giuliani bankruptcy filing claims ‘net income’ is $2,308 per month — after over $43,000 in monthly expenses
According to the court, Global Data Risk has been empowered to provide an array of services for the creditors and to use both contractors and subcontractors to help them perform the work.
The order explains those services, at length:
(a) identify and trace the income and assets of the Debtor;
(b) investigate the Debtor’s sources of income, assets and liabilities;
(c) analyze the Debtor’s expenses and budgets;
(d) investigate the Debtor’s ownership of, or interest in potential assets, including corporations, trusts and real estate;
(e) identify sources of information regarding the Debtor’s assets for further investigation and discovery;
(f) assist in the review of documents obtained by the Committee in furtherance of income and asset tracing efforts;
(g) identify and investigate prepetition and postpetition transfers of the Debtor’s assets;
(h) assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers;
(i) assist in the prosecution of Committee investigative activities, including by reviewing the Debtor’s pleadings, attending depositions and providing reports or testimony on case issues as requested by the Committee;
(j) if necessary, provide fact and expert witness testimony, reports and declarations in connection with litigation in this chapter 11 case or related adversary proceedings; and
(k) render such other consulting or other assistance as the Committee or its counsel may deem necessary that is generally consistent with the role of a specialized forensic financial advisor for this chapter 11 case and is not duplicative of services provided by other professionals in this chapter 11 case.
The locus of the order authorizing the group’s hefty investigative prowess — at the discounted and blended rate of $275 per hour — is basically the same as why Giuliani filed for bankruptcy.
In the aftermath of Donald Trump’s 2020 election loss, Giuliani spread false allegations against Georgia election workers Ruby Freeman and Wandrea’ ArShaye “Shaye” Moss — saying the pair engaged in fraud and had “cheated” Peach State voters.
A defamation lawsuit ensued, and a default judgment was issued in their favor after Giuliani essentially ignored the lawsuit and engaged in what the court termed a “willful shirking of his discovery obligations.” A trial was held to determine compensatory and punitive damages. Jurors issued their verdict, and the court entered a final judgment order on Dec. 18, 2023.
Giuliani filed for bankruptcy three days later.
More Law&Crime coverage: Rudy Giuliani asks bankruptcy judge to let him hire attorney for appeal of massive defamation judgment — and their connection runs deep
Due to those shirked obligations, the creditors’ attorney argued, “substantial doubt exists” the debtor is willing to “comply fully with his disclosure obligations” in the resulting bankruptcy case.
After months of argument, including even some minor objections from the U.S. Trustee, the court apparently agreed.
“The relief requested in the Application is granted,” Lane wrote.
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