Giuliani has proposed leaving bankruptcy protection as creditors are asking for a trustee to control his assets

By Katelyn Polantz and Sabrina Shulman, CNN

(CNN) — A federal bankruptcy judge told Rudy Giuliani on Wednesday that he plans to decide by the end of the week whether the former New York mayor should leave bankruptcy protection, which would allow two Georgia election workers to try to seize his properties, or put all of his finances under the control of a trustee.

Giuliani’s bankruptcy proceedings came to a head at a hearing in White Plains, New York, with several outbursts from the mayor, after creditors accused him of not being completely upfront about his finances as they are trying to collect what he owes them.

The developments move Giuliani closer to losing his multimillion-dollar apartments in Manhattan and Palm Beach, Florida, as fallout continues from his efforts as a lawyer for Donald Trump after the 2020 election. The election workers Ruby Freeman and Shaye Moss are Giuliani’s most significant creditors.

“It’s time for Mr. Giuliani to go back to the real world where he can’t use Chapter 11 as a sword and a shield,” Rachel Strickland, the attorney for Moss and Freeman, said in court.

Judge Sean Lane expressed concern about keeping Giuliani tied up in bankruptcy.

“I am concerned that the past is prologue” and that “difficulties in terms of transparency” into Giuliani’s finances during the bankruptcy proceedings might persist, Lane said at the hourlong hearing.

The judge said he plans to announce a decision Friday afternoon about what’s next for Giuliani.

Giuliani’s attorneys told CNN that if their client leaves bankruptcy protection, he might continue to litigate over control of his two homes and that he still wants to appeal the jury verdict of $148 million awarded to Freeman and Moss for defamation.

“Everything will be dealt with in state court,” Giuliani’s lawyer Heath Berger said outside the courthouse after the hearing, referring to Freeman and Moss possibly seeking a lien on his homes.

“The Freeman plaintiffs will take advantage of all of their remedies available, and Mr. Giuliani will take advantage of all remedies that he has available,” Berger added.

Hectic day in court

The bankruptcy fireworks on Wednesday began with filings, where Giuliani scrambled to change his position after months of fighting off his creditors.

Giuliani proposed to a judge he leave bankruptcy protection on Wednesday, essentially agreeing with Freeman and Moss while at the same time being angry with their lawyer’s criticisms of him.

If the judge agrees with their plan, Freeman and Moss “are entitled to take both of his homes immediately,” in Florida and New York, Strickland told CNN.

Giuliani’s attorney Gary Fischoff told the judge at the start of the hearing on Wednesday his team believed the purpose of Giuliani for being in bankruptcy has “run its course.”

Fischoff added the assets Giuliani has that Freeman and Moss may be able to claim immediately are jewelry, namely luxury watches, ​and his two apartments.

Giuliani piped up a few times in the hearing after calling in via his iPhone, about 10 minutes late.

But the judge told him not to interrupt.

“Would you get them on the phone!” Giuliani exclaimed at one point while Strickland was speaking to the judge, apparently trying to communicate with his attorneys.

The judge told him he should let Strickland finish, prompting Giuliani to respond, “including all the defamatory remarks?”

The judge then warned Giuliani he would cut his line if he kept interrupting.

If the judge does not agree to dismiss the bankruptcy case, other creditors have been arguing to the judge to remove all of Giuliani’s accounts from his control and place them under the control of a Chapter 11 trustee. That committee does not wish for Giuliani to leave bankruptcy.

“This is slick maneuvering,” Daniel Gielchinsky, a bankruptcy expert who isn’t involved in the case but following it closely, said in response to Giuliani’s 11th-hour move.

Giuliani has repeatedly said he plans to appeal the jury verdict Freeman and Moss won against him late last year, but can’t while he is in Chapter 11 proceedings.

Bernie Kerik, a close friend of Giuliani’s, told CNN on Wednesday morning that “his spirits are great.”

But “he’s frustrated with the system,” Kerik added. “He’s really frustrated by frivolous bullsh*t,” such as his many ongoing civil and criminal court proceedings.

The two men had spoken Tuesday night, Kerik said, but hadn’t discussed Giuliani’s bankruptcy situation.

An attorney for Giuliani also said on Wednesday that Giuliani at one point was open to settling at least one of the ongoing lawsuits he faces, but both sides couldn’t come to terms.

This story has been updated with additional developments.

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