In a significant development, Rudy Giuliani, the former mayor of New York City and attorney to ex-President Donald Trump, filed for Chapter 11 bankruptcy on Thursday, as per a court document.
This move comes less than a week after a jury directed him to pay a hefty sum of $146 million in damages to Ruby Freeman and Shaye Moss, Fulton County election workers.
The duo had filed a defamation lawsuit against Giuliani, who now estimates his liabilities to be in the range of approximately $100 million to $500 million. The initial damage award was pegged at $148 million, but it was later reduced to $145,969,000 by the federal judge overseeing the case.
Michael Gottleib, the legal representative for Freeman and Moss, expressed his views on Giuliani's bankruptcy filing. He stated, "This maneuver is unsurprising, and it will not succeed in discharging Mr. Giuliani's debt to Ruby Freeman and Shaye Moss."
Judge Beryl Howell of the U.S. District Court for the District of Columbia, ordered Giuliani to immediately compensate the election workers on Wednesday. The judge expressed apprehension about Giuliani's honesty regarding his financial situation and his potential non-compliance with the judgment. Giuliani had previously made false allegations that Freeman and Moss were involved in a fraudulent ballot processing scheme following the 2020 presidential election. His attorney recently indicated that Giuliani's financial resources were insufficient to meet the compensation sought by Freeman and Moss.
Ted Goodman, a political adviser to Giuliani, shared his thoughts with CBS News on the bankruptcy filing. He said, "No person could have reasonably believed that Mayor Rudy Giuliani would be able to pay such a high punitive amount." He further added, "Chapter 11 will afford Mayor Giuliani the opportunity and time to pursue an appeal, while providing transparency for his finances under the supervision of the bankruptcy court, to ensure all creditors are treated equally and fairly throughout the process."
Bankruptcy allows debtors to erase their debts and start afresh financially. However, not all financial obligations can be discharged in bankruptcy debts such as child support, alimony, and certain taxes must still be repaid. According to the U.S. courts, debts arising from "willful and malicious injury by the debtor to another entity" cannot be discharged despite filing for bankruptcy.
A similar situation was faced by conspiracy theorist Alex Jones, who filed for bankruptcy last year after being ordered to pay nearly $1.5 billion to the Sandy Hook families for falsely claiming the 2012 Newtown school shooting was a hoax. A judge prevented Jones from discharging the debt in bankruptcy due to the "willful and malicious" clause.
Freeman and Moss's attorney, Michael Gottlieb, predicted that Giuliani's attempt to erase his debt to his clients would be unsuccessful. He reiterated, "This maneuver is unsurprising, and it will not succeed in discharging Mr. Giuliani's debt to Ruby Freeman and Shaye Moss."
Giuliani, whose net worth was once estimated to be over $50 million, has seen a significant decline in his wealth. In the bankruptcy filing, he estimates his assets to be between $1 million and $10 million. Legal documents reveal that Giuliani owes the IRS about $724,000 in income tax for 2022 and 2021 and is liable for an additional $265,000 in income tax to New York state.
The bankruptcy filing also reveals that Giuliani owes unspecified amounts to Dominion Voting Systems and Smartmatic USA, both of whom sued him in 2021 over false allegations that they were involved in rigging the 2020 presidential election. Giuliani also owes an unspecified sum to Hunter Biden, President Biden's son, who sued Giuliani and another lawyer in September for allegedly improperly accessing and sharing his personal information.
To raise funds, Giuliani has resorted to selling 9/11 shirts for $911 and promoting sandals sold by Trump ally Mike Lindell. He also began selling video messages on Cameo for $325 each, although his page on the site now states that Giuliani is no longer available.
Joe Sibley, Giuliani's attorney, told the jury last week that the financial damages sought by Freeman and Moss would be the "civil equivalent of the death penalty," ahead of the ruling ordering Giuliani to pay millions in damages.
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