Creditors accuse Giuliani of 'flouting court orders,' ask bankruptcy judge to hold him in contempt, issue sanctions

Former Mayor of New York Rudy Giuliani (AP Photo/Seth Wenig)

Attorneys representing Rudy Giuliani’s creditors in his bankruptcy case are asking the presiding judge to hold the former New York City mayor in contempt of court and order him to pay sanctions , claiming that he has intentionally refused to comply with orders to produce personal and business financial documents.

The motion states that Giuliani, his associate Maria Ryan, and his numerous businesses have “utterly failed to comply with their discovery obligations, electing instead to impede the Committee’s investigation into the Debtor’s assets, liabilities and financial condition.”

The motion was filed by counsel for the Official Committee of Unsecured Creditors, which represents defamed Georgia election worker Shaye Moss, Dominion Voting Systems — the voting technology company Giuliani insisted must have rigged the 2020 election in favor of President Joe Biden — and Noelle Dunphy , a former Giuliani employee who sued and accused him of sexual assault, harassment, and fostering a hostile work environment while not paying her for her work.

“Specifically, the Non-Producing Parties have refused to comply with the Committee’s duly issued and served Requests for the Production of Documents,” the motion states. “The Requests seek documents critical to understanding the assets, liabilities and financial condition of the Debtor — especially crucial where, as here, the Debtor has failed time and time again to make adequate disclosures of his assets, liabilities and finances. Further, the Non-Producing Parties constitute the most definitive source of financial information regarding the Debtor.”

The Committee added that Giuliani’s failure to comply with the required production of documents “simply cannot be permitted to continue.”

Giuliani’s conduct, per the Committee, is a “clear continuation” of his “prepetition practice of shirking his discovery obligations and flouting court orders.” The Committee previously referred to Giuliani’s financial disclosures as “at best, half-baked” and aimed at prioritizing “delay over progress.”

According to the filing, when the May deadline for filing came around, he produced 15 documents in his personal capacity and “nothing whatsoever” for his businesses. When asked about the failure to comply, Giuliani’s attorney “simply has not responded” to communications, the committee said.

During a June 17 hearing regarding Giuliani’s numerous failures, the onetime personal attorney to Donald Trump blamed his non-responsiveness on “the difficulty of retaining financial professionals” and “the recent illness of a part-time employee,” which the Committee said were “uncompelling and unavailing.”

In an effort to “encourage” Giuliani to comply with the disclosure obligations, the committee is urging the court to “impose appropriate sanctions” such as daily fines until the documents are produced.

Earlier this week, U.S. Bankruptcy Judge Sean Lane heard arguments over the Committee’s request that he “immediately” appoint a watchdog to oversee Giuliani’s finances and the day-to-day operation of his businesses.

The committee on Friday also informed the court that it planned to subpoena several individuals for documents pertaining to Giuliani’s case, including MyPillow CEO Mike Lindell. The subpoena seeks documents and communications “sufficient to show the nature of any relationship” between the men and any contracts or agreements for any Giuliani-owned businesses, including “Rudy Coffee.”

In recent days, the Committee argued that the “ time has come ” for a trustee to step in who would have the power to “manage the affairs of the debtor and make all decisions” about Giuliani’s property and to “propose a plan of reorganization” in the Chapter 11 bankruptcy proceedings he initiated following the $148 million judgment in the suit brought by Moss.

The Committee even floated the possibility that Giuliani engaged in “ bankruptcy crimes ” by operating through the “alter ego LLC” Giuliani Communications, claiming he may be “funneling funds that belong to his creditors to his business and using his business as a personal piggy bank, which is fraudulent.”

To date, the Committee has framed the appointment of a trustee as a no-brainer on grounds of Giuliani’s alleged “dishonesty,” “incompetence,” “gross mismanagement,” “inadequate record-keeping and reporting,” “inappropriate relations between the Debtor and his wholly-owned businesses,” “conflicts of interest,” and “breach of fiduciary duty.”

Lane ended those proceedings by stating he was ‘very concerned” with Giuliani’s conduct, adding, “I’m not going to beat a dead horse.” The next hearing in the case is currently scheduled for July 10.

Matt Naham contributed to this report.

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