Trump's ex-lawyer Giuliani booted from bankruptcy after fee dispute resolved

Former New York Mayor Rudy Giuliani talks to reporters before the Republican National Convention Tuesday, July 16, 2024, in Milwaukee. (AP Photo/Paul Sancya)

New York -

A U.S. judge formally ended Rudy Giuliani's bankruptcy on Friday — a move that lets sexual harassment, defamation and other lawsuits proceed against him stemming from his past work for former President Donald Trump — following a two-week delay precipitated by his failure to pay certain legal fees.

Giuliani, 80, filed for Chapter 11 bankruptcy protection in December after a court in Washington ordered him to pay US$148 million to two Georgia election workers who he had falsely accused of rigging votes in the 2020 presidential election in which Joe Biden defeated Trump.

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The bankruptcy filing automatically stopped lawsuits from proceeding against Giuliani and stopped the election workers from trying to collect on their judgment.

U.S. Bankruptcy Judge Sean Lane ended Giuliani's bankruptcy on Friday, after ruling on July 12 that Giuliani should be kicked out of bankruptcy over his failure to make required financial disclosures.

The earlier ruling did not immediately take effect because of Giuliani's "troubling" refusal to repay creditors who were forced to hire investigative accountants to fill gaps in his financial reports, according to Lane.

The White Plains, New York-based judge said last week that he was having second thoughts about ending the bankruptcy, and he was instead considering other options, such as appointing a bankruptcy trustee to take over Giuliani's finances or forcing the former New York mayor to testify about his refusal to pay the fees.

Giuliani resolved the fee dispute by agreeing to put US$100,000 in an escrow account while the bankruptcy court determines the precise amount he must pay. Giuliani's creditors had sought about US$350,000 for their investigation into Giuliani's finances.

The remainder of the fees will be paid from the proceeds of the sale of either Giuliani's New York penthouse apartment or his luxury Florida condo.

Giuliani's attorney Heath Berger said his client is planning to sell the New York apartment, which is already up for sale, and live in Florida. Berger declined to comment when asked where Giuliani came up with the US$100,000 for the escrow account.

The bankruptcy prevented the former Georgia election workers, Wandrea "Shaye" Moss and her mother Ruby Freeman, from collecting on the judgment in their case, while freezing other lawsuits stemming from Giuliani's work for Trump.

After bankruptcy, Giuliani intends to appeal the US$148 million verdict in the Georgia defamation case, his attorneys said.

Trump is the Republican nominee in the Nov. 5 U.S. presidential election.

(Reporting by Dietrich Knauth, Editing by Will Dunham and Alexia Garamfalvi)