Hey Rudy, where’s the money?
That’s what a federal judge seemed to be wondering as he warned he might have to take Rudy Giuliani to court after the former New York mayor claimed he was too broke to pay administrative fees in his recently dismissed bankruptcy case.
The fact that Giuliani has not paid the standard fee — even though he owns nearly $10 million in real estate — technically prevents the dismissal of the case from becoming official.
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“An order dismissing the case was not entered because of a dispute over the payment of administrative costs incurred during the case,” Judge Sean H. Lane wrote in a July 25 letter, “namely whether and how the debtor will pay those costs.”
The judge warned that he might have to force the recently disbarred lawyer to appear in Manhattan federal court to testify and prove how broke he is.
It is unclear exactly how much Giuliani, once dubbed “America’s Mayor” for his response to the Sept. 11 terrorist attacks, owes in fees.
A lawyer unaffiliated with the case said that while those fees can sometimes reach six figures, Giuliani’s debt is likely much lower since the legal case lasted only a few months.
Giuliani’s bankruptcy filing was dismissed on July 12 after his “repeated failure” to be financially transparent, Lane wrote.
The same judge argued in June that an administrator should be appointed to oversee Giuliani’s finances because the “tough on crime” former federal prosecutor could not be trusted after his “dishonesty, incompetence and gross mismanagement of (his) affairs.”
Giuliani still maintains that he does not have the funds to pay the financial advisers who participated in the bankruptcy proceedings, but he has not provided evidence to support his claim that he is a defaulter.
“Instead, the debtor has simply refused to pay these expenses,” Lane wrote in the July 25 letter.
But Giuliani does have money — at least $10 million, the judge said.
While the true extent of Rudy’s assets remains under wraps, Lane says it is “indisputable” that Giuliani still owns a small real estate fortune, including a $5.6 million Upper East Side apartment and a $3.5 million condo in Florida.
That might explain why Lane is seeking full payment from Giuliani, although judges in such cases can reject pro forma fees if they prove truly unaffordable.
The letter said Giuliani might be required to give “additional testimony under oath,” despite the risk that “this path could in some way reflect the failed efforts at financial transparency that have marred the case to date.”
Lane said the court and Giuliani’s team might even need to reconsider dismissing the case and imposing a trustee to oversee the disgraced mayor’s assets and to “quickly liquidate assets such as the New York apartment, if appropriate.”
Giuliani’s lawyers, in another $10 million lawsuit for sexual harassment and wage theft – one of several civil cases pending against him – seized on Lane’s letter.
That case, filed by Noelle Dunphy, had been delayed pending the bankruptcy proceedings. Lawyers argued in a recent filing that since the bankruptcy dismissal has not yet been formalized, the proceedings should be stayed again.
“The lifting of the bankruptcy stay is premature and inappropriate,” they wrote.
A source familiar with the matter said the judge declined to reinstate the recess but agreed to move a hearing scheduled for this week to the fall.
Giuliani’s lawyers did not respond to a request for comment Monday.
New York Post
