Rudy Giuliani talks to reporters before the Republican National Convention, on July 16, 2024, in Milwaukee. (AP Photo/Paul Sancya).
As evidenced by a hearing two days ago that ended with a U.S. bankruptcy judge’s audible annoyance and anger for having his time wasted, last week’s dismissal was far from the last word in the saga that has been Rudy Giuliani’s Chapter 11 case, as attorneys for the former NYC mayor were unable to speak with complete transparency about how much cash is in their client’s checking and savings accounts. And even though the judge demanded specifics by “high noon” on Thursday, Giuliani’s attorneys and his creditors continued to disagree into Friday about what’s gone on behind the scenes.
How we got here
Judge Sean Lane held a Zoom call on Wednesday with Giuliani’s team, lawyers for creditors, and attorneys for defamed Georgia election workers Ruby Freeman and Shaye Moss, in the hopes that the parties could agree upon an enforceable way to ensure that the substantial professional fees of Global Data Risk, a forensic investigator creditors hired to probe Giuliani’s finances, will be paid.
Those fees have been estimated at $350,000, as attorneys for the Official Committee of Unsecured Creditors — representing Moss, and Giuliani sexual assault accuser Noelle Dunphy, and Dominion Voting Systems — told the court.
While creditors proposed that the bill be paid by draining checking and savings accounts that are part of Giuliani’s estate and that the remainder could come out of a sale of Giuliani’s Upper East Side multi-million dollar apartment overseen by a “limited purpose trustee,” Giuliani’s lawyers fired back at the “onerous, punitive” proposal by suggesting that Global Data Risk could place a lien on the apartment and be paid at closing.
But the hearing didn’t actually make any headway because no one involved in the call could say how much money in cash was in Giuliani’s bank accounts, not even his own attorneys, and Giuliani, meanwhile, has been busy making the rounds at the Republican National Convention in Milwaukee.
I’m very proud of my friend, Sen. @MarcoRubio.
I enjoyed my time campaigning for him in Florida back in 2010. A family man who loves his country. 🇺🇸 pic.twitter.com/hlqcfeCnBZ
— Rudy W. Giuliani (@RudyGiuliani) July 19, 2024
After Lane told Giuliani attorneys Gary Fischoff and Heath Berger that they “hold the keys to solving this problem,” demanding an answer then and there about the “liquid assets” available to Giuliani, the proceeding had to pause for a break of about an hour so the attorneys could try and get in touch with their client.
When the lawyers jumped back on the Zoom call, Lane was clearly not happy about what he was told.
Rachel Strickland, an attorney for Ruby Freeman, told the judge that a just provided Giuliani checking statement showed that the account had dropped from $60,000 to about half as much was in there one week earlier, showing Amazon and Apple expenses, travel expenses for his Milwaukee RNC appearance, a payment to maintain Giuliani’s NYC and Florida properties, and marketing firm payments. She said that a savings account was only said to have a “small” amount in it.
Heath Berger, for his part, told Lane “[w]e got in touch with the debtor as quick as we could.”
The judge shot back by calling the lack of transparency on basic numbers “frankly unbelievable and uniquely unhelpful,” and threatened that “a lot of bad things that can happen” to Giuliani if he doesn’t comply, before softening his language slightly.
“There are a lot of things that can happen that your client does not want to happen,” the judge said, raising the prospect of putting Giuliani in the witness box.
Lane directed Giuliani’s attorneys to respond by “high noon” on Thursday with an update so he can move forward and appropriately effectuate the dismissal that Giuliani and Freeman’s lawyers both want.
What’s happened since
When Giuliani’s attorneys responded, they did so at 12:02 p.m. on Thursday, and the “update” contained no update.
“The parties have been engaged in extensive negotiations over the last 24 hours and unfortunately, a final resolution has not been reached at this point,” said a letter signed by Berger. “The parties are still talking and I am hopeful a joint resolution will be forthcoming soon.”
Five hours later, Ruby Freeman’s lawyer provided a starkly different account and seemed to jab at the letter coming after the “high noon” deadline the judge set, pointing out that it was filed at “12:02 p.m. today.”
Putting “extensive negotiations” in scare quotes, Rachel Strickland told Lane that much of Thursday was “spent with Debtor’s counsel trying to reach his client.”
“In light of the Debtor’s claims of limited access to cash and new reports of the Debtor, his assistant, and his companion flying first class this week, the Committee and the Freeman Plaintiffs requested additional disclosure from the Debtor regarding his recent expenditures,” the lawyer said, linking to a CNN story in a footnote. “The Debtor has not provided the requested information.”
After noon on Friday, Berger followed up by taking issue with Strickland’s “allegations” and seeking to “clarify some issues.”
“The parties were in good faith negotiations in trying to resolve this matter. We provided Ms. Strickland and member (sic) of this Committee bank statements as originally requested and made numerous offers to try and resolve the issues,” Berger said.
Berger claimed that Thursday was not, in fact, “spent trying to get in touch” with Giuliani.
“I had been in contact all day with the Debtor which allowed me to make numerous offers to the parties in an attempt to resolve this matter,” the lawyer said.
As of 2:20 p.m. on Friday, neither the Strickland nor the judge has responded on the docket.
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