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Rudy Giuliani files for bankruptcy. It won't get him off the hook for the $148 million he owes.

Jacob Shamsian,Paul Squire   

Rudy Giuliani files for bankruptcy. It won't get him off the hook for the $148 million he owes.
  • Rudy Giuliani has filed for Chapter 11 bankruptcy in New York.
  • A recent court case in Georgia ordered the former mayor to pay out $148 million.

Rudy Giuliani says he's bankrupt.

But bankruptcy protections won't save him from having to pay out the $148 million he owes two Georgia elections workers he defamed, a bankruptcy expert told Business Insider.

Giuliani — who's gone from former New York City mayor to die-hard Trump ally — filed for Chapter 11 bankruptcy protection in New York on Thursday, less than a week after a court found him liable of defamation.

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

Goodman said the bankruptcy filing would give 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."

Because defamation is an "intentional tort" — meaning Giuliani broke civil laws on purpose — he can't jettison the $148 million judgment through the bankruptcy process, according to Eric Snyder, the chairman of the bankruptcy practice at Wilk Auslander LLP.

"If you owe somebody money and you get a judgment, you can get rid of that in the bankruptcy," Snyder told Business Insider. "But if the judgment comes from certain things — like fraud, breach of your duties, intentional torts — then you can't get rid of them."

The bankruptcy filing doesn't list his assets, but it estimates them to be worth between $1 million and $10 million. Business Insider previously reported that Giuliani has listed a New York City apartment for sale at a $6.5 million asking price, but has studiously avoided disclosing any details about his finances in several ongoing court battles.

On the other side of the ledger, Giuliani listed up to $500 million in liabilities, including the $148 million judgment for the Georgia election workers, Ruby Freeman and Wandrea "Shaye" Moss, as well as more than $700,000 to the IRS, and more than $265,000 to New York tax authorities.

The liabilities also include potentially hundreds of millions more to other people and companies that have sued him, including Hunter Biden (alleged hacking of his laptop), Noelle Dunphy (alleged sexual assault), Daniel Gill (allegedly lying to police to get him arrested), Smartmatic (alleged defamation for election conspiracy theories), Dominion (also alleged defamation for election conspiracy theories), and former Dominion executive Eric Coomer (alleged defamation for — you guessed it — election conspiracy theories).

US District Judge Beryl Howell, the judge overseeing the case brought by Freeman and Moss, on Wednesday ordered Giuliani to pay the $148 million immediately, which appeared to be the direct trigger for the bankruptcy filing.

The bankruptcy automatically pauses all pending civil lawsuits against him. It also means that the other plaintiffs suing Giuliani would be fighting for scraps.

"If these two workers are in for 148 million, how hard are people going to want to fight to split up 5 or 6 million?" Snyder told Business Insider.

A Dominion spokesperson told Business Insider that the company planned to move ahead with its defamation lawsuit against Giuliani anyway, wanting to hold him responsible for his falsehoods about the company's role in the 2020 election.

"Dominion's effort to hold Rudy Giuliani accountable will move forward," the spokesperson said.

A lawyer for Noelle Dunphy said her suit will also move forward.

"Whatever the state of Mr. Giuliani's finances, and whatever other circumstances he may face, we will never be deterred from our pursuit of justice and accountability," Attorney Justin Kelton told Business Insider in a statement.

Dunphy's lawsuit also names as defendants several of the ex-mayor's companies, which have not yet filed for bankruptcy.

The bankruptcy also won't stop the criminal prosecution against Giuliani, in Fulton County, over his role in trying to overturn the results of the 2020 election in Georgia.

According to Snyder, that case puts Giuliani in a bind, since he may be hesitant to disclose all of his personal information in the bankruptcy case out of worry that the Atlanta prosecutors will use it against him.

He has to thread a needle by answering the questions demanded by the judge and the creditors, while not sharing anything that would jeopardize his criminal defense.

"I'm sure his criminal lawyer will tell him not to answer certain questions in the bankruptcy," Snyder said.

This story has been updated.

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