Rudy Giuliani speaks during a news conference outside the federal courthouse in Washington, D.C. in December 2023 (AP Photo/Jose Luis Magana).
Attorneys for Rudy Giuliani, his creditors, and defamed Georgia election workers told a bankruptcy judge that the parties have finally agreed on a way to end the doomed case that the jurist weeks ago decided should be dismissed for cause.
Under the agreement, filed Wednesday morning and awaiting U.S. Bankruptcy Judge Sean Lane’s signature upon review, Giuliani would initially have to pay up $100,000 into an escrow account the day after the dismissal order is entered to cover part of the estimated professional fees of Global Data Risk, the forensic financial investigator that Official Committee of Unsecured Creditors hired to probe the former NYC mayor’s assets over the course of the bankruptcy, which Giuliani voluntarily filed in the U.S. Bankruptcy Court for the Southern District of New York following the $148 million defamation judgment awarded to Ruby Freeman and Shaye Moss in December.
It appears the $100,000 payment has already been made, however.
“Further, undersigned counsel for the Debtor represents that the Dismissal Condition described in Paragraph 3 of the Revised Dismissal Order was satisfied as of July 30, 2024, meaning that dismissal of this case will take effect immediately upon entry of the Revised Dismissal Order,” court documents said.
Global Data Risk, whose fees have been estimated at $350,000, will have to file fee application documents, and the agreement contemplates that there could be some lingering disputes before the final sum is approved.
Giuliani would also have to move fairly quickly to sell either his multi-million dollar Upper East Side apartment in New York or his Florida condo, since Global Data Risk would be granted under the agreement “continuing, valid, binding, enforceable, non-avoidable and automatically and properly perfected security interests in and liens” on those properties to cover the remainder of the fees from “whichever sale occurs first” — with a caveat.
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“For six (6) months following entry of this Order […], GDR shall have no right and shall take no action to foreclose upon the GDR Liens or otherwise seek to exercise or enforce any rights or remedies against the NYC Apartment or Florida Condo other than receive the proceeds from the sale thereof to satisfy the Stub Professional Fee Amount,” the agreement said. “Upon expiration of the GDR Standstill Period, and until such time GDR’s allowed fees and expenses are paid in full, GDR shall have the right to take all actions to foreclose upon, and recover in connection with, the GDR Liens and otherwise seek to exercise or enforce all of its rights and remedies against the NYC Apartment and Florida Condo.”
Giuliani would have to keep the properties “in good condition, at least comparable to their current condition,” and have “casualty insurance […] in an amount not less than the full replacement value of the Debtor’s interest in each property,” the agreement added.
Of note, Freeman and Moss appear to have agreed to pay the remainder of the Global Data Risk fees if they first “receive proceeds from any sale of the NYC Apartment or the Florida Condo,” though this seems to be an unlikely outcome if Giuliani launches an appeal to substantially reduce or overturn the defamation judgment as he has long wanted but could not do during bankruptcy.
Upon dismissal, the Official Committee of Unsecured Creditors would be dissolved. The committee’s lawyers at Akin Gump Strauss Hauer & Feld LLP have, on a pro bono basis, represented Dominion Voting Systems, Giuliani sexual assault accuser Noelle Dunphy, who will continue her lawsuit when the bankruptcy is officially thrown out, and Shaye Moss.
The agreement comes two weeks after the judge in the case angrily demanded answers about the former NYC mayor’s cash assets and threatened to put him in the witness box “under oath” so he could get those answers and effectuate dismissal.
“There are a lot of things that can happen that your client does not want to happen,” Lane told Giuliani’s lawyers in court on July 17th.
As the days passed and the parties continued to tussle over Global Data Risk’s fees and the dwindling amount of money in Giuliani’s checking account, the judge again floated putting Giuliani “under oath” at a potential evidentiary hearing and wondered if dismissal was still going to happen.
Now Lane has an opportunity to make it happen.
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