The judge in Rudy Giuliani’s bankruptcy case is growing increasingly frustrated, suggesting on Thursday that he may require the former New York City mayor take the stand to testify about his finances.
Since U.S. Bankruptcy Judge Sean Lane earlier this month ordered Giuliani’s bankruptcy be dismissed over a lack of financial transparency, the former Trump attorney and his creditors have been in a standoff for how to pay $400,000 in estimated administrative expenses so the case can be closed out.
Lane had expressed exasperation with the lack of progress at a hearing last week. In a new order issued Thursday, he warned Giuliani he may need to testify under oath to answer questions about his available assets.
“The most obvious path forward is to initiate proceedings to assess the details of the Debtor’s current financial circumstances with the ultimate goal of crafting a detailed dismissal order that ensures the payment of the estate’s administrative expenses,” Lane wrote.
“Such a route will inevitably include disclosure of documents and might include testimony under oath by the Debtor,” he continued. “Of course, this path might mirror in some ways the unsuccessful efforts at financial transparency that have plagued the case to date.”
But Lane also cautioned that he may “need to reconsider” dismissing Giuliani’s bankruptcy and instead appoint an independent bankruptcy trustee to take control of the mayor-turned-Trump-attorney's finances, a move that Giuliani has resisted.
“While the Court previously announced its intention not to waiver on dismissal of the case, there may come a point when dismissal is no longer an option because the Debtor is unwilling to pay these administrative expenses, a necessary requirement under the law for dismissal of the case,” Lane wrote.
The judge ordered the parties to submit written proposals for next steps by the end of the month.
Giuliani filed for Chapter 11 bankruptcy in December after a jury ordered him to pay $148 million for defaming two Georgia election workers, Ruby Freeman and Shaye Moss, by spreading a baseless conspiracy that the duo was involved in mass election fraud in 2020. Giuliani has vowed to appeal.
After months of rising tensions and accusations of bad faith, the judge said he would toss Giuliani’s bankruptcy, which has enabled him to remain in control of his finances while delaying needing to pay the sum.
But before formally closing the case, the parties have sparred over how Giuliani should pay out $400,000 in estimated expenses and fees owed to a firm the bankruptcy court approved to investigate the former mayor’s finances.
The creditors contend Giuliani is failing to be transparent with his available assets that could be used to pay the fees. Giuliani’s legal team, meanwhile, has said they have made “numerous offers to try and resolve the issues.”
After the judge urged them to return to the negotiating table multiple times, they have been unable to reach an agreement.
Lane warned at a hearing last week that he was losing his patience, saying Giuliani was essentially sticking his head in the sand.
“There are a lot of bad things that can happen,” Lane said. “Or let me rephrase, there are a lot of things that your client doesn't want to happen [that] will happen.”
