Rudy Giuliani files for bankruptcy following $146 million defamation suit judgment

Rudy Giuliani files for bankruptcy in wake of defamation ruling

Former New York City mayor and Donald Trump attorney Rudy Giuliani filed for bankruptcy Thursday, according to a court filing. 

Giuliani filed for Chapter 11 bankruptcy less than a week after a jury ordered him to pay $146 million in damages to Fulton County election workers Ruby Freeman and Shaye Moss, who sued him for defamation. He estimates his liabilities are between about $100 million and $500 million. The damage award was originally set at $148 million, but the federal judge presiding over the case later reduced it to $145,969,000.

"This maneuver is unsurprising, and it will not succeed in discharging Mr. Giuliani's debt to Ruby Freeman and Shaye Moss," Michael Gottleib, a lawyer for the two women, said in a statement.

On Wednesday, Judge Beryl Howell of the U.S. District Court for the District of Columbia, ordered Giuliani to compensate the pair of election workers immediately, expressing concern that he may have been dishonest about his finances and that he might not comply with the judgment.

Giuliani had falsely claimed in the wake of the 2020 presidential election that the election workers engaged in a fake ballot processing scheme. His attorney recently signaled that his pockets weren't deep enough to pay out what Moss and Freeman had been seeking as compensation. 

Giuliani political adviser Ted Goodman told CBS News that the bankruptcy filing "should be a surprise to no one."

"No person could have reasonably believed that Mayor Rudy Giuliani would be able to pay such a high punitive amount," he said in a statement. "Chapter 11 will afford Mayor Giuliani the opportunity and time to pursue an appeal, while providing transparency for his finances under the supervision of the bankruptcy court, to ensure all creditors are treated equally and fairly throughout the process. 

Can Giuliani discharge his defamation debt?

Bankruptcy lets debtors wipe the financial board clean by erasing debt. Yet not all financial obligations can be discharged in bankruptcy — debts such as child support, alimony and some taxes must still be repaid.

Among the debts that people can't walk from despite filing bankruptcy are those arising from "willful and malicious injury by the debtor to another entity," according to the U.S. courts.

A similar situation arose with conspiracy theorist Alex Jones, who filed for bankruptcy last year after being ordered to pay nearly $1.5 billion to the Sandy Hook families after calling the 2012 Newtown school shooting a hoax. A judge barred Jones was from discharging the debt in bankruptcy because of the "willful and malicious" clause. 

Moss and Freeman's attorney, Michael Gottlieb, predicted that Giuliani would be unsuccessful in erasing his debt to his clients.

"This maneuver is unsurprising, and it will not succeed in discharging Mr. Giuliani's debt to Ruby Freeman and Shaye Moss," Gottlieb said.

Giuliani net worth

At one time Giuliani's net worth was estimated to be in excess of $50 million, but his wealth has plunged. In the bankruptcy filing, he estimates his assets at $1 million to $10 million. Giuliani owes the IRS about $724,000 in income tax for 2022 and 2021 and is on the hook for an additional $265,000 in income tax to New York state, according to legal documents. 

Giuliani also lists "unknown" debts to Dominion Voting Systems, which sued him in 2021 over allegations he falsely stated that the voting technology company was involved in rigging the 2020 presidential election, and to Smartmatic USA, another voting systems company that also filed suit against him in a similar case accusing him of defamation. 

The bankruptcy filing also shows that Giuliani owes an unspecified amount to Hunter Biden, President Biden's son. Hunter Biden in September filed suit against Giuliani and another lawyer, accusing them of having improperly accessed and shared his personal information after obtaining it from the owner of a Delaware computer repair shop, according to the Associated Press.

To generate cash, he's sold 9/11 shirts for $911 and pitched sandals sold by Donald Trump ally Mike Lindell. He also started selling video messages on Cameo for $325 a pop, although his page on the site says Giuliani is no longer available.

The financial damages sought by Freeman and Moss would be the "civil equivalent of the death penalty," Giuliani's attorney Joe Sibley, told the jury last week ahead of the ruling ordering him to pay millions in damages.

Editor's note: This story and headline have been updated to clarify that the judge reduced the amount due to $146 million.

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