Experts: Despite Giuliani's bankruptcy, defamed election workers "can collect every penny he has"

A federal judge ruled Wednesday that former Trump lawyer Rudy Giuliani must immediately pay $148 million to the two former Georgia election workers he falsely accused of ballot manipulation after the 2020 election. The next day the former mayor of New York filed for bankruptcy.

Ruby Freeman and Shaye Moss, the two Georgia election workers who won the defamation verdict against Giuliani, asked the judge to waive the standard 30-day waiting period and force him to pay them as soon as possible.

In their request to Judge Beryl Howell, the mother-daughter duo said that Giuliani had previously disregarded court orders related to the money he owed them. They pointed out that Giuliani was facing persistent demands from creditors, including his former lawyer, and was burdened by “significant debts threatening his personal solvency,” The New York Times reported.

“[Given] that Defendant Giuliani has already refused for months to pay the fees awarded in this Court’s prior sanctions orders, there is especially good reason to believe that Defendant Giuliani intends to evade payment of the judgment by any means he can devise,” their lawyers wrote.

Howell agreed with Freeman and Moss and wrote in her order that “Giuliani’s failure to ‘satisfy even more modest monetary awards entered earlier in this case,’ provides good cause to believe that he will seek to dissipate or conceal his assets during the 30-day period.”

During the trial, the pair detailed the racist threats and harassment they faced after Giuliani falsely accused the mother and daughter of ballot fraud at a Georgia vote counting center and claimed they were scanning ballots for President Joe Biden multiple times on Election Day.

Even after Howell found that Giuliani was liable for defamation, intentional infliction of emotional distress and civil conspiracy the former mayor continued to defame Moss and Freeman.

“Everything I said about them is true,” Giuliani told reporters.

When a reporter asked if he regretted his actions, Giuliani responded by saying: “Of course I don’t regret it. I told the truth. They were engaged in changing votes.”

This led Moss and Freeman to sue Giuliani for a second time, asking the judge to permanently ban him from speaking about them.

“Defendant Giuliani continues to spread the very same lies for which he has already been held liable,” the new lawsuit says. “Defendant Giuliani’s statements, coupled with his refusal to agree to refrain from continuing to make such statements, make clear that he intends to persist in his campaign of targeted defamation and harassment. It must stop.”

The latest lawsuit marks the most recent legal consequence the former New York mayor is facing related to his legal work for former president Donald Trump after the 2020 election. 

Even though he could still appeal the damages awarded by the jury, Howell pointed out that the sum the jurors came up with was, in fact, on the "conservative" side. 

Giuliani, who continues to be buried in legal challenges and debt, on Thursday filed for bankruptcy, claiming he had between $100 million and $500 million in liabilities and $1 million to $10 million in assets, according to a filing in U.S. Bankruptcy Court in New York.

He listed President Joe Biden's son, Hunter Biden, Smartmatic USA as well as Moss and Freeman as creditors. In September, Hunter Biden filed a lawsuit against Giuliani for violating his personal computer data. Similarly, Smartmatic has taken legal action against Giuliani and several Trump allies for asserting that the company's voting machines manipulated votes from Trump to Biden.

"The filing should be a surprise to no one," Giuliani's political adviser Ted Goodman said in a statement. "No person could have reasonably believed that Mayor Rudy Giuliani would be able to pay such a high punitive amount. 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." 

Despite Giuliani filing for bankruptcy, “debt for intentional torts are not dischargeable” and plaintiffs can “garnish any sources of income,” former U.S. Attorney Barb McQuade, a University of Michigan law professor, told Salon.

“The plaintiffs may not collect $148 million, but they can collect every penny he has,” McQuade said.

Facing a multitude of legal battles, Giuliani has accumulated substantial fees and expenses in both criminal and civil cases. With the costs adding up, his lawyer argued in August that Giuliani has “limited financial resources” and “cannot afford to pay” some fees. At times, the former mayor of New York has even turned to Trump’s political action committee for help paying his legal bills.

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Now, that Giuliani has filed for bankruptcy, the filing puts a “stay or hold” on all enforcement proceedings, former federal prosecutor Neama Rahmani explained. 

“The plaintiffs will have to get in line with any other unsecured creditors, and they’ll probably get pennies on the dollar because Giuliani doesn’t have the funds to pay everyone,” Rahmani said. “The good news for them is that defamation and other intentional acts usually are not dischargeable in bankruptcy, so they’ll still be able to try to collect after Giuliani comes out of bankruptcy.”

The Department of Justice’s Office of the Trustee is also good at pursuing and “setting aside” any fraudulent transfer to avoid payment, he continued. 

“So if Giuliani tries anything to hide his assets, he’ll get into more criminal trouble,” Rahmani said.