The End of Bankruptcy Protections for Giuliani: a Lesson for You

One of the most important reasons that people file for bankruptcy is that they want to escape the relentless pressure that creditors place on them. It appears that former New York City mayor Rudy Giuliani may have hoped for just those protections when he filed for bankruptcy months ago, and, while it worked for a while, the judge in the case recently reversed course on Guiliani, saying the protections he’d been entitled to previously were no longer available. The decision, it seems, came after the judge tired of Guiliani’s opaqueness following the bankruptcy declaration. It could be a warning tale to those with similar ambitions.

How Could This Happen? 

Judge Sean Lane seems to have agreed with creditors, who posited that Guiliani had exploited the bankruptcy system as a way to avoid paying creditors, acting in bad faith from the beginning.

 No Transparency 

The judge outlined his objections to Guiliani’s lack of transparency in a 22-page opinion, stating the following:

• When in came to companies solely owned by the former mayor, there was no information provided relating to the financials;
• Guiliani had received a chunk of money in wire transfers recently;
• Guiliani did not disclose to creditors information related to an upcoming book contract or earnings related to his radio show and podcast.

Guiliani’s Worth 

According to Guiliani, his net worth is just shy of $11 million based on two properties he owns, one in New York and the other in Florida. On the other hand, he owes $148 million to two women who won a defamation lawsuit against him, over $1 million to lawyers unrelated to the bankruptcy, $1 million in back taxes, and thousands in delinquent phone bills. Another couple of million dollars are owed to other creditors.

What’s Next? 

With an end to bankruptcy protections, creditors are free to put liens on his properties in an attempt to collect at least a portion of what they are owed. Additional possessions that could be confiscated include his Mercedes sports car, a collection of luxury watches, bank accounts, and sports memorabilia owned by Guiliani. Those assets, according to creditors, have been undervalued by Guiliani, and could bring in a significant amount of money.

An Aberration? 

The accusations of fraud on the part of Guiliani are quite serious, but they are not entirely unique. According to the FBI, about one in ten bankruptcy filings are fraudulent, most of them because individuals attempt to hide or undervalue assets. When caught, fraudsters face up to five years behind bars and up to a quarter million dollars in fines.

Are You Considering Bankruptcy? 

There are two important points for anyone thinking of filing for bankruptcy in Florida.

Play it straight and get the experienced Miami bankruptcy attorneys at the Law Office of Julia Kefalinos working for you.  We always strive for the best possible outcomes for you! Schedule a confidential consultation in our Miami office today.

Source:

cnn.com/2024/07/12/politics/judge-dismisses-giuliani-bankruptcy-case/index.html