Rudy Giuliani agrees to last-minute deal to end bankruptcy case, paying out $400k

The agreement comes weeks after the bankruptcy judge threw out the case

Cash-strapped Rudy Giuliani has reached an agreement with his bankruptcy creditors on the conditions of his case dismissal, which requires the former New York City mayor to pay $400,000 in administrative expenses.

The deal was announced on Wednesday after Judge Sean Lane threw out the bankruptcy case earlier this month. But the disgraced ex-mayor is still on the hook to pay two defamed election workers, whom he owes $148m. He is also required to pay administrative fees for the case, which the former Trump lawyer had refused to pay despite it being a legal requirement for dismissal.

The agreement, which still has to be signed off by the judge, proposes that Giuliani transfers $100,000 to his lawyers “to be held in escrow for the purpose of paying allowed professional fees and expenses” one day after the order is entered.

The remaining fees shall be paid from the proceeds of the sale of either Giuliani’s New York City apartment or Florida condo, “whichever sale occurs first.”

Giuliani’s New York condo, which has been up for sale on and off throughout the year, is valued at around $5.6m, while his Florida condo is valued at about $3.5m. The former mayor’s lawyer previously argued against their client selling both places, claiming that it would result in Giuliani “join[ing] the ranks of the homeless.”

Rudy Giuliani agreed on July 31 to pay $400,000 so his bankruptcy case could be dismissed (Copyright 2023 The Associated Press. All rights reserved.)

Last week, Lane ordered the parties in the case to submit filings to “provide their views on the most appropriate path forward.” The agreement was reached hours before the deadline.

The judge wrote on July 25 that despite ordering a dismissal, the court and the parties might need to “reconsider whether dismissal is the most appropriate course of action in this case” because “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.”

By agreeing to this arrangement, Giuliani dodged further scrutiny over his financial disclsoures, including testifying under oath — which Lane had previously floated as a possibility.

His creditors, as well as the judge, had grown frustrated over Giuliani’s lack of transparency around his finances over the seven-month bankrupty case. 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 agreement on Wednesday came on the same day that a hearing had initially been scheduled in the case against his former employee-turned-sexual assault accuser Noelle Dunphy.

Since the bankruptcy case was dismissed, Dunphy had asked for the New York Supreme Court to lift its stay on her case and “place this matter back on the active calendar” at the “earliest convenient date.”

Giuliani’s lawyers requested to push back the court date in a letter to the judge, saying “lifting the bankruptcy stay is premature and improper” since Lane had called into question whether the dismissal would stick.