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(Photo by Drew Angerer/Getty Images)

When he marched into bankruptcy court in December of 2023, just seven days after a jury ordered him to pay $148 million to Ruby Freeman and Shaye Moss, Rudy Giuliani’s goal was clear: He wanted to forestall collection of the judgment pending appeal without having to post a supersedeas bond.

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It does not seem to have occurred to him that being in bankruptcy would impose some rather unpleasant obligations on him, such as having to live by a budget and making monthly truthful reports about his finances. His failure to live up to either of these obligations has gotten him in hot water with the court, not to mention the creditors committee, which is composed of Moss, the general counsel for Dominion Voting Systems — which has a pending defamation suit against him — and Noelle Dunphy, a former employee who sued him for various torts and employment law violations. The committee moved to put Rudy under control of a trustee, and at a hearing two weeks ago, Judge Sean Lane seemed inclined to agree.

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Meanwhile, after being rebuffed once before in April, Giuliani has once again renewed his bid to lift the stay of the Freeman/Moss litigation to allow him to pursue his appeal — even as the plaintiffs’ collection efforts remain on hold. In a motion filed yesterday, his attorney Gary Fischoff argued that circumstances have changed since April in two respects.

First, Freeman and Moss have moved to have the verdict declared non-dischargeable as a willful, malicious tort. That hearing is not until July 10, but “this renewed motion assumes that the Court has held, or will hold, that (a) the Judgment in Freeman v. Giuliani is entitled to collateral estoppel effect in this case, and therefore (b) the debt embodied in the Freeman Judgment is not dischargeable.”

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This would appear to obviate the need for such a hearing, since the debtor takes his impending loss as a foregone conclusion and predicate for relief. But, perhaps it’s just … untimely?

Second, “the Debtor has made a showing that the Appeal has merit.” This “showing” takes the form of a “preliminary appellant’s brief” filed by his buddy Kenneth Caruso, a criminal and commercial litigator in New York, who drafted a proposed appellate brief laying out all the ways Judge Beryl Howell would be reversed if only poor, innocent Rudy could get himself in front of the Second Circuit. How this is a changed circumstance is left as an exercise for the reader.

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But that was not the end of Rudy’s week of magical thinking. Fischoff also fired off a letter to Judge Lane arguing that Freeman and Moss should be barred from claiming that Rudy is collaterally estopped from denying facts decided at trial if he’s not allowed to appeal the case.

Freeman and Moss immediately replied in their own letter, noting that Giuliani himself chose to stay the defamation appeal by filing the bankruptcy. He hasn’t been prevented from appealing. He marched into bankruptcy court and demanded the benefits of an automatic stay before even noticing his intent to appeal — so if that appeal is on hold, that’s on him. If he later succeeds on appeal, he can file to reopen the bankruptcy and revisit the issue of dischargeability. And anyway, “any possible dispute about the application of collateral estoppel is now moot” since Rudy’s defense in the defamation suit was so haphazard that he effectively conceded all the factual claims at issue. Finally, they note that Fischoff’s letter is functionally an un-sanctioned surreply and should be disregarded.

But other than that … bang up job, fellas!

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In re Rudolph Giuliani [Bankruptcy Docket via Court Listener]

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

Topics

Bankruptcy, Defamation, Ruby Freeman, Rudy Giuliani, Shaye Moss