Rudy Giuliani’s creditors may join forces to collect following bankruptcy bid
NEW YORK — Rudy Giuliani’s Chapter 11 bankruptcy bid may see him go up against a crowd of creditors currently planning to join forces — and could end up policing every penny he spends if they succeed, the Daily News learned Tuesday.
Hunter Biden, a fired Staten Island grocery store worker, defamed Georgia election volunteers, voting machine companies, Giuliani’s former assistant turned sexual assault accuser Noelle Dunphy, and several high-powered law firms are among the eclectic list of creditors the ex-mayor says are looking to drain his accounts.
Federal bankruptcy officials on Dec. 22 informed those demanding the highest sums of their right to form an unsecured creditors committee, according to documents obtained by The News.
“The United States Trustee urges you to consider serving on the Committee,” wrote Andrea Schwartz, a trial attorney with the Office of the U.S. Trustee. “The Committee performs a vital role in Chapter 11 reorganizations, and we hope that you will choose to participate.”
The 79-year-old Giuliani filed for bankruptcy protection in Manhattan on Dec. 21, less than a week after a jury determined he owed Georgia election workers Ruby Freeman and Wandrea “Shaye” Moss around $146 million for falsely accusing them of fraud — prompting his spokesperson to say, “No person could have reasonably believed” he could pay. Giuliani listed debts as high as $500 million and between $1 million and $10 million in assets.
Giuliani divided his creditors into two categories. The IRS and New York tax authorities — whom he owes a combined $989,918 in income tax from 2021 and 2022 — are listed as priority. The remaining creditors mainly comprise people and entities who have sued him for claims ranging from defamation to sexual assault and law firms who say their bills never got paid. Collectively, they’re demanding a staggering $151,787,859.98. Giuliani denies all allegations.
Among those who had applied to serve on the committee by Tuesday, according to their lawyers, were Dunphy, ex-ShopRite worker Daniel Gill, who’s suing him for $2 million for falsely accusing him of assault, along with the law firm of his longtime attorney and confidante, Bob Costello, which is suing him for almost $1.4 million in unpaid legal fees.
“Yes, we will be on the creditors committee,” Costello told The News.
Gill’s lawyer, Ron Kuby, said his client “just wants fair compensation for what Giuliani did to him.”
“Giuliani’s assets would be far greater had he not previously sold his soul,” Kuby added. “And Mr. Giuliani is not going to weasel out of it through bankruptcy.”
Attorneys for Moss and Freeman, President Biden’s son Hunter, voting machine companies Smartmatic and U.S. Dominion, an election security worker and various other entities suing Giuliani would not confirm to The News whether they had applied. Lawyer Arthur Aidala, owed $387,859.98 by Giuliani in outstanding legal fees, declined to say whether his firm would apply to join.
Those who are selected to serve on the committee of Giuliani’s worst nightmares may soon have the power to ensure he’s doing all he can to cough up his dues — like investigating his business dealings, requiring he consult with them before making major decisions, and participating in a plan to reorganize his assets or potentially craft one of its own.
Gerry DiConza, a partner at Archer & Greiner and an expert in bankruptcy litigation, said if appointed, the committee would represent the best interests of all creditors yet to be compensated and would be able to employ lawyers, accountants, and other financial experts on Giuliani’s dime.
“Part of the duties of a committee are to investigate the debtor’s transactions prior to bankruptcy and to determine whether or not what the debtor is seeking to do, as far as confirming a plan, is fair for all creditors and complies with the bankruptcy law,” DiConza said.
The committee could also request a judge convert the Chapter 11 case to Chapter 7, which could see Giuliani forced to liquidate his assets.
“They’ll also keep a keen eye on what he’s proposing to do post-bankruptcy,” DiConza said. “Whatever he’s earning post-bankruptcy after the filing typically are not considered the property of the estate, so there are going to be issues with what assets are available for creditors for distribution — and the committee will investigate that and take a look at what should be part of the plan to get out of Chapter 11 and what is appropriately not part of the plan.”
Giuliani’s last-ditch bankruptcy effort froze all civil litigation facing the embattled ex-mayor and former federal prosecutor, who’s separately confronting criminal charges alongside Donald Trump and 17 others for allegedly plotting to overturn the results of the 2020 presidential election in Georgia. He’s pleaded not guilty in that case.
Reached by The News, Giuliani did not immediately have comment.
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