Judge Says Rudy Giuliani’s ‘Gross Mismanagement’ Of His Finances In Bankruptcy Case Could Lead To Appointment Of Trustee To Take Over

On Monday, bankruptcy judge Sean Lane warned that he has serious concerns about Rudy Giuliani’s lack of compliance and cooperation in the former New York City mayor’s Chapter 11 case.

The judge didn’t immediately decide whether to appoint a trustee to oversee Giuliani’s finances but warned of potential “gross mismanagement” after hearing arguments that the 80-year-old has failed to comply with court orders.

A group of creditors asked Lane to appoint a trustee, arguing Giuliani “can’t be trusted because of dishonesty, incompetence and gross mismanagement.” The creditors’ lawyer, Rachel Strickland, said there were “huge red flags” with Giuliani filing incomplete operating reports and “funneling money” through his company.

Despite a court order not to defame Georgia election workers, Ruby Freeman and Shay Moss, Strickland said Giuliani’s recent online post referencing “voter fraud” was a “clear reference” violating that order. She called Giuliani “shrewd” and argued for a trustee because “he just won’t follow the law.”

But Giuliani’s lawyer, Gary Fischoff, said there was “nothing unusual” about how the former mayor conducted business through his communications company. When Lane pressed Fischoff to provide information, he admitted Giuliani hadn’t turned over details on company finances.

Lane called it “highly problematic” and said he could appoint a trustee based on “gross mismanagement” alone, adding “there didn’t necessarily have to be bad intent.” He was “disturbed about the case status” and Giuliani’s “troubling attitude” toward the legal system.

Giuliani filed for bankruptcy in December with over $150 million in debts, including a $148 million defamation judgment against him for falsely claiming widespread fraud in the 2020 election.

Fischoff said Giuliani had been “slow to adapt” to financial reporting requirements, noting the difficulties of finding a new accountant after his prior bookkeeper quit. But Lane called that issue “exceedingly rare” in a bankruptcy case.

The judge also questioned Giuliani’s plan to hire the law firm that represented Harvey Weinstein without providing details to the court.

Last week, Giuliani’s creditors accused him of using funds to pay his alleged girlfriend and her daughter.