‘Huge red flags’: Giuliani’s ‘mess’ of finances is slammed in bankruptcy court

Embattled former New York mayor’s creditors want a trustee to take control of his finances

The judge in former New York City mayor Rudy Giuliani’s bankruptcy case slammed on Monday his failure to comply with deadlines and inability to keep bookkeepers to manage his “mess” of financial records.

Giuliani’s bookkeeping was heavily criticized during a three-hour-long hearing in his high-profile Chapter 11 bankruptcy case. Judge Sean Lane also heard heated arguments from Giuliani’s creditors, who want a trustee to seize control of his finances and force the disgraced mayor to file monthly operating reports on time.

“There are reasons to be concerned here,” the bankruptcy court judge declared, conceding that the former mayor’s records appear to be a “mess.”

“At a certain point, a failure to comply with [court] orders means my voice will take on a decided edge,” the judge warned. “If people don’t obey court orders, it’s a profound problem.”

Giuliani attended the hearing via Zoom, sitting in a leather chair in front of a shelf bearing a bust of President Abraham Lincoln and in between two packages of the former mayor’s self-branded Rudy Coffee, a source told The Independent. It appears to be the same setup he uses when filming “America’s Mayor Live.”

Giuliani sitting in front of his shelf featuring self-branded coffee (‘America’s Mayor Live' / screengrab)

Ahead of the hearing, Giuliani’s lawyers explained in a filing that financial reporting has been “difficult” because the Trump ally has been “unable to find an accounting professional willing to assist.” His attorneys have also said that the bookkeeper they are using has been “ill.”

“When someone shows you who they are, believe them,” said Rachel Strickland, a lawyer who represents the two election workers who Giuliani defamed, referring to the alleged pattern of sharing delayed and inaccurate financial records.

“His bookkeeper is ill, his accountant has quit, and no one else will work for him. That is not an excuse. Those are huge red flags,” Strickland said. She added that the former mayor continues to make defamatory statements about her clients and that they have received death threats.

It is a “troubling fact” that Giuliani can’t keep a bookkeeper or accountant, Judge Lane conceded.

Fischoff said he received an email from an accounting professional on Monday morning who was “interested” in getting involved in the case.

A lawyer for the creditors warned that as things currently stand, in addition to asking the court to compel Giuliani to file his monthly operating reports, at the next hearing, “I would imagine we may be seeking sanctions as well.”

The judge replied, “I’m not surprised to hear that.”

Judge Lane also heard arguments regarding the appointment of a trustee.

Rachel Biblo Block, a lawyer for the creditors’ committee, used a PowerPoint to show why the court should appoint a trustee “sooner rather than later,” due to Giuliani’s “dishonesty,” “incompetence,” “gross mismanagement” of his affairs and breach of fiduciary duty as well as to protect the interests of the creditors.

She also complained about Giuliani’s lack of transparency over his reporting, describing it as “inaccurate and incomplete.”

Strickland spoke in favor of the immediate appointment of a trustee. Giuliani “just won’t follow the law. The creditors are unanimous. We need this relief,” Strickland said.

Giuliani’s lawyers have opposed the creditors’ motion to appoint a trustee: “A trustee cannot compel an 80-year-old to work harder, more hours or longer hours. It appears that the motion is more punitive than productive.” On Monday, Gary Fischoff, Giuliani’s attorney, said the appointment of a trustee would be “harmful” to the creditors.

The judge didn’t make any rulings on Monday. The next hearing is scheduled for July 10.