Rudy Giuliani forced to pay nearly $300k to firm that probed his finances in tossed bankruptcy case

There was an ‘alarming and inappropriate lack of financial transparency by the debtor’ that led to more work for the firm, the bankruptcy court judge said

Cash-strapped former New York City Mayor Rudy Giuliani must still pay roughly $300,000 to a firm hired to investigate his finances, a bankruptcy judge ordered Tuesday, despite Giuliani’s request to reduce that amount by nearly $80,000.

More than a month after his Chapter 11 bankruptcy case was officially dismissed, a dispute between Giuliani and Global Data Risk (GDR), a firm hired by Giuliani’s creditors to investigate his finances, has still plagued the case. The dismissal order requires the former mayor to pay the firm’s expenses — but he objected to the amount the firm says it is owed.

Judge Sean Lane on Tuesday agreed that a “slight reduction” was appropriate, so he ordered a 7.5 percent cut from the original amount, saving the former mayor about $25,000.

In a September 11 filing, Giuliani’s lawyers had asked the court to slash the amount that the former mayor owed by $77,275.00, a 24 percent reduction.

GDR had asked the former mayor to reimburse the firm more than $330,000 for the nearly 1,200 hours of work performed from February 9 through July 11 in the bankruptcy case. That amount of research was “necessary because of the Debtor’s obstructionist tactics and repeated failure to comply with the Court’s orders,” GDR argued.

A judge ordered Giuliani to pay roughly $300,000 to a firm that investigated his finances during the bankruptcy proceedings (REUTERS)

Giuliani’s lawyers, however, claimed the firm only worked 281 hours and accused them of “engaging in duplicative billing,” citing entries that show multiple members of the firm attended the same meeting or performed the same task.

“I’m not a big fan of objecting to people’s fees,” Giuliani’s lawyer began on Tuesday. “Based upon the hours worked, it seems excessive.”

The judge didn’t entirely buy the argument. Over the seven-month-long case, there was an “alarming and inappropriate lack of financial transparency by the debtor which led to…a much higher than normal level of work” by GDR, Judge Lane said. Still, he said that 13 professionals working on the case seemed too high, so he granted a minimal reduction for the former mayor.

Throughout the case, his creditors have complained about “deficiencies in his financial reporting and disclosures,” including discrepancies on payments related to his Florida condo, “unauthorized payments” to his alleged “girlfriend,” and his failure to comply with discovery requests. The judge at one point even threatened to haul him back to court to testify about his finances under oath, given his lack of transparency outside of court.

GDR accused the former mayor of “another baseless and bad faith crusade in this Court.” Giuliani’s filing “is disappointing, but unsurprising, given the tenor of the case prior to dismissal,” the firm wrote. “Yet it strains credulity to imagine how else meetings are supposed to work other than by having multiple people attend.”

The former mayor is essentially opposing the “concept of meetings,” the firm argued, “but it is impossible to understand how GDR otherwise should have conducted its meetings other than by having multiple GDR timekeepers attend.”

The firm thought limiting the number of professionals “to one timekeeper’s entry for each meeting would affect an absurd and completely unfair result that grossly undercompensates advisors for meaningful work achieved as a team.”

The US Trustee Andrea Schwartz said on Tuesday that she spoke to the firm, looking into the contents of the meetings, and found that their rates were “reasonable.” She also noted that GDR’s rates were below what is typical for financial advisers. In this field, “There are a lot of meetings,” Schwartz said, cutting into Giuliani’s argument about excessive meetings.

Since the bankruptcy case was dismissed, the other legal battles he faces have restarted. He still faces a sexual assault suit, brought by his former assistant Noelle Dunphy. Meanwhile, in Georgia, the pair of election workers that the former mayor defamed during his 2020 election fraud campaign are trying to seize Rudy Giuliani’s watches, sports memorabilia, a Mercedes-Benz, and his New York City apartment to try to recoup the $150 million they are owed.