Giuliani doesn’t want to sue Trump for $2m. His creditors might make him do it anyway

As the disgraced mayor faces a mountain of legal and financial woes, he could be compelled by his creditors to sue the former president

Kelly Rissman,Alex Woodward
Wednesday 06 March 2024 17:22 GMT
Rudy Giuliani tells The Independent he has 'nothing to hide' after bankruptcy hearing

Rudy Giuliani could be forced to sue longtime ally Donald Trump by a group of creditors that the cash-strapped former New York City mayor owes tens of millions of dollars.

The Committee of Unsecured Creditors, which represents individuals and entities to whom Mr Giuliani owes money, are “discussing” making Mr Giuliani file a lawsuit against Trump to get their money, a source close to the matter told The Independent.

The group has had ongoing discussions since early February, the source says, about possible litigation against Mr Trump in an effort to collect $2m in Mr Giuliani’s unpaid legal fees. The disgraced lawyer claims he is owed that amount for his spurious effort to overturn 2020 election results.

Donald Trump and Rudy Giuliani (AP / Getty)

Legally, the committee can use the bankruptcy court to compel Mr Guiliani to sue the former president.

That could happen despite Mr Giuliani saying during his recent bankruptcy hearing that he was adamant he was owed by either the Trump campaign or the Republican National Committee – not Mr Trump himself.

“Mayor Giuliani will not be suing President Trump,” Ted Goodman, Mr Giuliani’s political advisor, told The Independent in response to learning that the committee is discussing the potential lawsuit. A Trump spokesperson has not yet replied to a request for comment.

Mr Giuliani’s apparent reluctance to sue his former client would not come as a surprise. The two New Yorkers have had a decades-long bond that culminated in Mr Giuliani advising Mr Trump on his 2016 and 2020 campaign — but $2m worth of unpaid wages could test an already strained partnership.

That $2m figure appears to stem from a verbal agreement between the two men for Mr Guiliani to receive a $20,000 daily rate for legal fees. The $20,000 arrangement was first reported by The New York Times in 2021.

Two other individuals told The Independent that they heard the $20,000 a day arrangement firsthand or had knowledge of the verbal agreement between Mr Trump and Mr Guiliani.

Now, Mr Guiliani’s creditors are exploring multiple avenues to obtain what they are owed, including forcing him to possibly sue the Trump campaign, and/or the Republican National Committee, according to the source close to the matter.

The committee will be seeking evidence of the legal fees agreement between Mr Trump and Mr Giuliani to support pursuing litigation, says the source.

Mr Giuliani filed for Chapter 11 bankruptcy in December 2023 after a colossal defamation verdict that ordered the man formerly known as “America’s Mayor” to pay more than $148m to a pair of election workers he falsely accused of manipulating votes in Georgia.

He also faces lawsuits and collections from more than a dozen other parties, including the IRS and city agencies, Dominion Voting Systems, Hunter Biden, and Noelle Dunphy, a former employee who accused him of sexual assault.

Shortly before his bankruptcy hearing last month, Mr Giuliani listed his assets and debts in a court filing and included a “possible claim for unpaid legal fees against Donald J Trump” for an undetermined amount.

During the hearing, Mr Giuliani was asked about this claim. He estimated he was owed $2m for his work. He claimed that he was paid for some legal expenses but “never got a salary.”

“Once I took over, it was my understanding that I would be paid by the campaign for my legal work and my expenses would be paid,” he told the hearing. “When we submitted the invoice for payment, they just paid the expenses. Not all, but most of the expenses. They never paid the [legal fees].”

Mr Giuliani became Mr Trump’s personal lawyer in April 2018. In November 2020, the former New York City mayor then made a nationwide effort to try to overturn Mr Trump’s 2020 election loss.

An email from Giuliani associate Maria Ryan obtained by The New York Times in 2021 was reportedly sent to Trump campaign officials and suggested that Mr Giuliani was going to be paid $20,000 a day for his work.

The email reportedly claims that Mr Giuliani began working on election litigation on 4 November 2020 – one day after Election Day.

Former associate Lev Parnas told The Independent that Mr Giuliani told him in “several conversations” that he and Mr Trump struck up a $20,000-per-day verbal agreement.

Mr Parnas also said that Ms Dunphy, who sits on the creditors committee, was present for a conversation in which Mr Giuliani put Mr Trump on speakerphone as he discussed the $20,000 daily rate. Her lawyers have not responded to The Independent’s request for comment.

In a separate conversation, Mr Parnas remembered Mr Giuliani telling him that the former mayor was “expecting” $2m from then-President Trump.

The $2m figure correlates with the $20,000 day rate over the three-month span between the November 2020 election and February 2021, when Trump adviser Jason Miller said Mr Giuliani is “not currently representing President Trump in any legal matters.”

When pressed during the bankruptcy hearing about whether a written agreement existed for fee payment between the former president and his former lawyer, Mr Giuliani called it a “word-of-mouth situation.”

​​As further evidence, Mr Giuliani referred to two lawyers in his bankruptcy hearing who he said knew about the agreement and also did not receive payments. They did not reply to a request for comment.

Mr Guiliani previously made attempts to recover his wages. His former lawyer, Robert Costello, reached out to at least six attorneys close to the former president regarding the collection of money allegedly owed to Mr Giuliani, the Times reported in 2023.

Mr Costello deferred The Independent’s request to comment to Mr Giuliani’s spokesperson.

Ohio-based bankruptcy attorney Adrienne Hines, who is not associated with the case, explained the process that the creditors committee is undergoing.

After Mr Giuliani identifies his assets — and the people and entities who potentially owe him money — it then becomes the “job” of the committee to “investigate what assets are available, what their values are, who else has claims and where they can get the money from,” according to Ms Hines.

If they believe the claims are “viable” – like the one listed regarding Mr Trump – the committee essentially can “step into the shoes” of the debtor, and can file a lawsuit, try to negotiate a settlement, or pressure him to sue, Ms Hines told The Independent.

Pursuing litigation against Mr Trump would hinge on whether the committee can show that an agreement existed, like a contract, Ms Hines explained.

In this case, that legal fees arrangement allegedly relied on a verbal agreement.

However, the expenses that Mr Giuliani confirmed he had received, which may be proved through checks, wire transfers, or bank statements, could also support that an agreement between the two men had been in place. That could be key to determining which entity owes him.

If the committee forces Mr Giuliani to sue the former president, this could put the former mayor in a bind with his former client. Mr Trump hosted a $100,000-a-plate fundraiser in September 2023 at his Bedminster golf club to help Mr Giuliani pay his legal bills; the event reportedly raised less than $1m across 13 donors.

Attorneys for creditors listed in court documents have deferred comment to lawyers representing the committee, which did not respond to requests from The Independent.

Without legal action, creditors are scrambling to get back what they are owed, with Mr Giuliani reporting assets worth more than $10m — including two properties each valued in the millions, a Mercedes-Benz, and a signed Joe diMaggio shirt — that he could try to sell.

Another lawsuit against the former president would add to mounting legal expenses as Mr Trump seeks the Republican nomination for president. His campaign was forced to spend millions of dollars within the last year on his civil and criminal legal battles, and he faces devastating multimillion dollar judgments for defamation and fraud in New York.

The financial consequences of 2020 election lies has surged past $1bn, with Mr Giuliani’s defamation verdict and related lawsuits, as well as a Fox News settlement with a voting machines company that averted a high profile defamation trial, among other parallel lawsuits.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in