Rudy Giuliani Might Not Be Saved by Bankruptcy

Rudy Giuliani might not be able to escape a $148 million judgment by declaring bankruptcy, a senior business attorney has said.

Real estate attorney Paul Golden, author of Litigating Constructive Trusts and a partner at New York law firm Coffey Modica, told Newsweek that bankruptcy may not protect Giuliani if he intentionally caused injury to the reputation of two election workers.

Giuliani declared bankruptcy in December, two days after he was ordered to pay $148 million to a mother and daughter he wrongly accused of secretly adding ballots for Joe Biden during the presidential election in 2020. Giuliani was Donald Trump's personal lawyer at the time.

The election workers, Ruby Freeman and her daughter, Shaye Moss, will have to go to bankruptcy court to recover any money.

Newsweek emailed Giuliani's spokesman for comment on Thursday.

Giuliani's first bankruptcy hearing will be in New York before Judge Sean Lane, likely in early January.

Golden said that there are "numerous exceptions" to bankruptcy protection, including one under federal bankruptcy law if there is "willful and malicious injury by the debtor to another entity."

"Generally, the intentional tort of defamation would constitute willful and malicious injury so long as the debtor, here Giuliani, knew the statements against Freeman and Moss were false," Golden said.

Giuliani, the former New York mayor, is also facing a sexual assault claim by a woman named Noelle Dunphy.

In May 2023, Dunphy launched a $10 million lawsuit against him alleging "abuses of power, wide-ranging sexual assault and harassment, wage theft and other misconduct" including "alcohol-drenched rants that included sexist, racist and antisemitic remarks."

Golden said that Dunphy's case may also be an exception to Giuliani's bankruptcy.

"I would expect that a court would rule that a sexual harassment claim is an intentional tort, and therefore any potential obligations in that separate case would also not be discharged," he said.

"It is always possible that Giuliani would try to make some claim that these [exemptions] do not apply to these matters. That would be an extremely difficult argument to make," he said.

John Bringardner, head of Debtwire, a global news and data organization covering debt and bankruptcies, told Newsweek that Giuliani's troubles will continue to mount in 2024, despite seeking bankruptcy protection.

"The $148 million judgment against him in the Georgia election worker case triggered the bankruptcy filing, but he still could face massive judgments in several other pending lawsuits, including a sexual assault claim from Noelle Dunphy...His bankruptcy will likely last for months, if not years, as his lawyers work out a plan to navigate payment of these and future potential claims," Bringardner said.