In a recent development, a legal expert has suggested that Rudy Giuliani, former attorney to Donald Trump, may not be able to shield his coffee company's profits from a defamation lawsuit.
The lawsuit was filed by two election workers, Ruby Freeman and her daughter, Shaye Moss, who were wrongfully accused by Giuliani of fraudulent activities during the 2020 election.
According to Newsweek, the case has taken an interesting turn as New York federal judge Lewis Liman has criticized Giuliani's attempt to use company law to protect the funds held by Giuliani Communications. This company, which is the recipient of the profits from Giuliani's coffee business, Rudy Coffee, was not directly involved in the defamation lawsuit.
During the 2020 election, while serving as Trump's attorney, Giuliani falsely claimed that Freeman and Moss were captured on CCTV adding ballots for Joe Biden at an Atlanta count center. The mother-daughter duo subsequently sued Giuliani for defamation. In December 2023, a Washington, D.C., jury awarded them $148 million, and they are now seeking to claim that money from Giuliani.
Eric Chaffee, a business law professor at Case Western Reserve University in Ohio, explained that while company law typically protects a limited liability company from unrelated lawsuits involving its executives, there are exceptions. "Rudy Giuliani's case demonstrates an exception to the rule," Chaffee said. "Rudy Giuliani organized Giuliani Communications, LLC to receive his profits from Rudy Coffee. The judge in his case has held that the company is the mere 'alter ego' of Giuliani based on how it functions."
The fact that Giuliani's image and name appear on each coffee package and that he has recorded online advertisements for it further solidifies the connection between Giuliani and his coffee company. Chaffee elaborated, "When a company is the mere alter ego of an individual, a court will view the assets of the company as belonging to the individual. That is what is occurring in Giuliani's case."
The funds from Giuliani Communications are received through Parkside Financial Bank and Trust in St Louis, Missouri. Judge Liman dismissed Giuliani's argument that Parkside was exempt from the case and that its assets should not be restrained by the court as "unpersuasive."
Liman wrote, "He asserts, in effect, that the assets being restrained are not those in which he has an interest and therefore should not be used to satisfy the judgment." He further clarified that the plaintiffs' restraining notice does not seek to have Parkside turn over the relevant funds to the plaintiffs or to have the court or Parkside determine the ownership of those funds.
Drawing from legal texts, Liman explained that the plaintiffs are seeking "a kind of freeze on such of the debtor's assets as the served person may have...It buys time, in other words." The attorney of Freeman and Moss has yet to comment on these recent developments.
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