Giuliani seeks to fight $148 million verdict despite bankruptcy

By Dietrich Knauth

NEW YORK (Reuters) - Lawyers for Rudy Giuliani asked a U.S. bankruptcy judge on Friday for permission to challenge a $148 million defamation verdict won by two former Georgia election workers that he falsely accused of fraud after former Republican President Donald Trump's 2020 election loss.

Gary Fischoff, an attorney for the former Trump lawyer, told U.S. Bankruptcy Judge Sean Lane at a court hearing in White Plains, New York, that Giuliani can't pay the $148 million verdict, much less have anything left over to pay others who have sued him.

Giuliani, who filed for bankruptcy in December, has few assets other than some real estate, and he is earning limited income from his podcast and radio show, according to Fischoff.

"He's currently suspended for the practice of law, so he can't earn income right now as a lawyer," Fischoff said. "There's no pot of gold at the end of the rainbow, and the debtor is going to give full disclosure."

Giuliani's bankruptcy filing came on Dec. 21, just days after the former New York City mayor was ordered to pay $148 million to Wandrea "Shaye" Moss and her mother, Ruby Freeman, who faced a deluge of threats after Giuliani falsely claimed they were engaged in voting fraud.

That filing automatically stops litigation from moving forward against him, including efforts to collect the judgment and other election-related defamation lawsuits.

In addition to the defamation verdict, Giuliani, who was known as "America's mayor" for his leadership of New York after the Sept. 11, 2001, attacks, faces a crush of debts stemming from his prior work as Trump's personal lawyer.

Giuliani has asked the bankruptcy court for a limited re-opening of the election workers' lawsuit to allow him to challenge the verdict, arguing that U.S. bankruptcy law's prohibition on continuing litigation is meant to protect debtors like him.

Attorneys for Moss and Freeman have opposed Giuliani's request, arguing that he's trying to have it both ways by using bankruptcy to stop their collection efforts while continuing to attack the judgment they won in federal court in Washington, D.C.

Moss and Freeman have also argued that Giuliani's bankruptcy should not allow him to duck the money he owes them, as judges have ruled that defamation penalties cannot be discharged in bankruptcy if a debtor has engaged in "willful and malicious" conduct.

The major creditors in Giuliani's bankruptcy case are people who have sued him, including Moss and Freeman, Democratic President Joe Biden's son, Hunter Biden, a former employee, Noelle Dunphy, and voting machine company Smartmatic.

None of the other lawsuits have resulted in verdicts yet. Fischoff said the Freeman and Moss judgment would "swamp" Giuliani and prevent him from paying anything to other creditors.

Giuliani's other debts include roughly $1 million in federal and state taxes, and $1.4 million in unpaid legal fees connected to his work as Trump's personal lawyer.

Giuliani also faces criminal charges of election subversion in Georgia, along with Trump and more than a dozen other co-defendants. He has pleaded not guilty.

His law license has been suspended in New York and he faces disbarment in Washington.

(Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and Bill Berkrot)