Courts

Rudy Giuliani Says He's Too Old And Incompetent To Need A Babysitter

Oh, Roodles!

By  
on
rudy giuliani

(Photo by Alex Wong/Getty Images)

Last night, the creditors committee in Rudy Giuliani’s bankruptcy filed a motion requesting permission to exceed the page limit in a reply, so as to more fully explicate to the court the extent of the debtor’s dumbassery. What followed was a 216-page diss track suggesting that Giuliani requires not just bankruptcy trustee, but perhaps a full-time nanny and regular sessions with César the Dog Whisperer.

On May 28, the committee moved for the appointment of a Chapter 11 trustee, arguing that Giuliani had failed to make mandatory disclosures, was paying disallowed expenses from his personal and business accounts, and had structured his compensation to flow to his businesses to deprive his creditors of funds:

His financial reporting and recordkeeping are abysmal, as he commingles his personal affairs with those of his shill businesses. And it follows therefrom that the Debtor cannot find even one accountant willing to work for him. Among other things, the chapter 11 trustee and the Committee will now need to investigate whether the Debtor is liable for bankruptcy crimes through the use of his businesses to divert resources away from his estate and creditors in connection with his purported income that he allegedly never personally received.

In a truly bizarre opposition filed June 10, Giuliani’s lawyer Gary Fischoff admitted that his client “has always done business through various entities” and that “his gross income for his services are deposited into the entity.” And Fischoff conceded that Rudy “may be struggling with some of the administrative aspects.” But the attorney bridled at the suggestion that his client is taking insufficient care to protect assets of the bankruptcy estate.

“Maybe the Committee also has a suggestion on who would employ an 80 year old disbarred attorney,” [sic] he scoffed.

In its reply last night, the Committee described the opposition as “a step-by-step guide for establishing ’cause’ requiring the appointment of a chapter 11 trustee,” consisting of “ten pages consisting largely of statements against interest and six pages of ‘legal argument.’”

Sponsored

The scare quotes are a nice touch, although not unwarranted — Rudy did actually give himself credit for making fewer unauthorized payments in March than in January, calling it “a positive improvement.” He also admitted to employing his girlfriend Maria Ryan, and her daughter Vanessa, and to paying their credit cards through his business. At the same time, he claims that his compensation is routed through the business and only comes to him after paying all the business’s bills, something which is “done out of habit – not fraudulent intent.”

“The Debtor either continues to operate a failing business with estate assets at his creditors’ expense, or the Debtor is, again, providing inaccurate financial disclosures,” the committee complained. “Regardless, the Debtor’s own facts support a finding of cause for gross mismanagement, incompetence, inadequate record-keeping and reporting, inappropriate relations with his wholly-owned business, conflicts of interest and breach of fiduciary duty.”

The reply is hundreds of pages of gobsmacked incredulity that Giuliani would lay out all the ways in which he’s defied the court’s orders and misappropriated assets, and then point to it as proof that the creditors would derive no benefit from the appointment of a trustee.

“A trustee can take control of all of the Debtor’s books and records, the economic and corporate governance rights of the Debtor’s wholly-owned companies, the sale of the Debtor’s New York and Florida homes and the monetization of the Debtor’s remaining non-exempt assets, while at the same time pursuing the recipients and/or beneficiaries of unauthorized postpetition payments and facilitating the return of estate assets that have been improperly diverted to non-Debtors,” they retorted incredulously.

As to the suggestion that the creditors are hounding an old man to get a job, the Committee notes that America’s erstwhile Mayor has a job, and that “the Debtor’s estate should benefit from the work he actually does, not his girlfriend, his girlfriend’s daughter or any other third party.” They also note that Vanessa Ryan (AKA Vanessa Fenderson, although the opposition refers to her as Vanessa Federson) is the defendant in two pending criminal cases in North Carolina, which Law & Crime reports relate to opioid trafficking. Whoopsie doodle!

Sponsored

“By painting himself as an elderly, dishonest and unemployable individual, the Debtor himself has proven to the Court why a trustee must be appointed without delay,” the committee added. “If the Debtor is in no position to find and hold a job, then surely he is in no position to manage his estate as a debtor in possession.”

The hearing on this motion is set for Monday, and Bankruptcy Judge Sean Lane has already run out of patience with the debtor, barring him from appealing the $148 million judgment he owes to Ruby Freeman and Shaye Moss, the Atlanta poll workers whose lives he ruined by falsely claiming they stole the state of Georgia from Donald Trump.

Be there, will be wild.

In re Rudolph Giuliani [Bankruptcy Docket via Court Listener]

Liz Dye lives in Baltimore where she produces the Law and Chaos substack and podcast.

Topics

, , ,