In a recent bankruptcy case involving Rudy Giuliani, a judge expressed his inclination to potentially dismiss the case after both Giuliani's lawyers and his biggest creditors, former Georgia election workers who won a $148 million defamation judgment against him, agreed that this was the best way forward. The case has been plagued with allegations from creditors that Giuliani is violating bankruptcy laws and potentially concealing assets.

If the case is dismissed, it would end Giuliani's pursuit of bankruptcy protection, but he would still be obligated to repay his debts. The creditors could explore other legal avenues to recover at least a portion of the money owed to them, such as obtaining a court order to seize Giuliani's assets, including his apartments.

U.S. Bankruptcy Judge Sean Lane, during a hybrid in-person and Zoom hearing, expressed concerns about Giuliani's lack of transparency throughout the proceedings and stated that he was leaning toward dismissal. Judge Lane plans to issue a decision by the end of the week and has scheduled a hearing for Friday to potentially announce his ruling. He dismissed the possibility of converting the case to liquidation, citing that it would not serve the best interests of Giuliani's indebted parties.

Giuliani's lawyer, Gary Fischoff, argued that dismissing the case would allow the former mayor to pursue an appeal in the defamation case, which stemmed from his efforts to overturn Donald Trump's 2020 election loss. Another alternative proposed was to continue the Chapter 11 bankruptcy case while a court-appointed trustee assumes control of Giuliani's assets.

Ruby Freeman and her daughter, Wandrea "Shaye" Moss, the former election workers who won the defamation judgment against Giuliani, accused him of using the bankruptcy process as a "bad-faith litigation tactic." Their lawyer, Rachel Strickland, argued that Giuliani should not have the luxury of conducting his life unaffected by creditors while bankruptcy proceedings are ongoing.

During the hearing, Giuliani interrupted and called Strickland's comments "highly defamatory." The judge scolded Giuliani for the interruption.

Philip Dublin, a lawyer representing a committee of Giuliani's other creditors, expressed the committee's preference to keep the bankruptcy case open with the appointment of a trustee.

Giuliani filed for Chapter 11 bankruptcy reorganization in December following the defamation judgment against him. The former mayor stated that the targeting and subsequent death threats by him towards Freeman and Moss, driven by false claims about the 2020 election, led to their victory in court and their subsequent pursuit of compensation.

Giuliani had initially requested to convert the case to a Chapter 7 liquidation, but during the recent hearing, his attorney argued against that option due to high administrative fees that would consume a substantial portion of his assets.

If the bankruptcy case is dismissed, Freeman and Moss could continue their efforts to collect the $148 million judgment in Washington, D.C., where they initially won their lawsuit, potentially avoiding additional legal fees related to bankruptcy court.

Judge Lane indicated that if the bankruptcy is dismissed, Giuliani would be prohibited from filing for bankruptcy protection for a period of 12 months. Freeman and Moss have also filed a request to declare that their judgment cannot be discharged during Giuliani's bankruptcy.

This bankruptcy case adds to a series of legal troubles for Giuliani, once heralded as "America's Mayor" for his leadership following the 9/11 attacks. Last week, Giuliani was disbarred as an attorney in New York due to repeatedly making false statements about the 2020 election. He may also face disbarment in Washington following a recommendation made in May. Additionally, Giuliani faces criminal charges in Georgia and Arizona related to his involvement in the effort to overturn the 2020 election; he has pleaded not guilty in both cases.

According to Giuliani's financial filings in the bankruptcy case, he listed debts amounting to nearly $153 million, including tax liabilities and potential judgments from lawsuits. His estimated assets were valued at $1 million to $10 million, with a retirement account being a primary source of income, amounting to just over $1 million in May.