Rudy's Bankruptcy Gets Un-Dismissed, While Gateway Pundit Gets The Boot

The worst people in the country are having a bad time. Let's point and laugh!

If watching rightwing assholes get hoisted by their own petards is your particular kink, last week was probably delightful for you. Within short order, judges yanked Rudy Giuliani back into bankruptcy and kicked the Gateway Pundit out of it.

Giuliani and Jim Hoft, who runs the Gateway Pundit, are truly terrible people who have done incalculable damage to American democracy, so it was delightful to see them both get shredded by the courts. And the fact that this shredding came about thanks to Ruby Freeman and Shaye Moss, the Atlanta poll workers whose lives these ghouls ruined by falsely claiming the mother and daughter masterminded a scheme to steal Georgia’s electoral votes, is just the cherry on top.

Rudy Colludy

On election night 2020, Freeman and Moss had the bad luck to be counting ballots at the State Farm Arena there was a reported water main break in the building. They were initially instructed to stop counting, but that order was quickly countermanded, and they returned to work. Thanks to Giuliani, video of them pulling boxes of ballots out from under the table went viral, along with the false claim that they had nefariously tabulated thousands of fraudulent ballots after contriving to send observers home.

The lie was immediately debunked by Georgia election officials, and yet Giuliani continued to repeat it for years.

In December of 2021, Freeman and Moss sued Giuliani for defamation, securing a default judgment in August of 2023, after 19 months of defiance by the defendant. Ultimately the jury awarded the plaintiffs $148 million in December, and a week later Giuliani filed for bankruptcy in a naked effort to stop Freeman and Moss from collecting on the verdict.

A bankruptcy has the effect of staying a pending court case, and Giuliani hoped that he’d be able to prosecute his appeal without having his assets seized. Except he wasn’t even able to prosecute the bankruptcy properly, failing to adhere to his disclosure requirements and courting sanctions with false and incomplete statements to the court. So US Bankruptcy Judge Sean Lane refused to allow him to appeal the Freeman case, which more or less defeated the purpose of the exercise entirely as far as Giuliani was concerned.

Rudy finally tapped out earlier this month, asking the court to dismiss the bankruptcy case. Judge Lane agreed, noting that Giuliani had already racked up hundreds of thousands of dollars in administrative fees by forcing the creditors to chase down his assets and seemed to have no actual plan to reorganize, the actual purpose of Chapter 11.

That should have been the end of it, and any sane person would simply have emptied his pockets and been on his way. But instead Giuliani proposed that the forensic accountants, who’d provided their services in bankruptcy and are entitled to be paid before the the case is dismissed, should be fobbed off with an IOU redeemable upon the sale of his Manhattan condo.

This is not how any of this shit goes, as a furious Judge Lane remarked at a July 17 hearing.

“I’m a patient man, but there are several ways to do this,” he warned Giuilani’s lawyers, who were on their own while there boss tippled all over the RNC. “There are ways to do this that include having your client sit in that witness box.” The judge ordered the parties to come up with a solution to get the administrative costs paid so he could dismiss the case and be done with this farce. And he made it clear that something very unpleasant would happen if Rudy didn’t get his shit together pronto.

Amazingly, the old goat still didn’t take the hint. And by last week, Judge Lane had had enough.

“[I]t is well established that a debtor must pay the administrative expenses associated with his bankruptcy as a condition of dismissal,” he seethed in an order on Thursday, when it became clear that Giuliani was still dragging his feet.

“[W]ith no resolution on the horizon here, the Court must take an active role in determining how to provide for payment of these administrative expenses if dismissal is to occur,” he went on, warning that “Such a route will inevitably include disclosure of documents and might include testimony under oath by the Debtor.”

Absolutely nothing good can happen to Rudy if the court puts him on the stand to explain where all his money went. And even if he manages not to perjure himself, Rudy may have snatched defeat from the jaws of victory by getting his case un-dismissed.

“While the Court previously announced its intention not to waiver on dismissal of the case, there may come a point when dismissal is no longer an option because the Debtor is unwilling to pay these administrative expenses, a necessary requirement under the law for dismissal of the case,” Judge Lane wrote. “Under such circumstances, the Court may be forced to reevaluate the alternative of a Chapter 11 trustee to supervise the administration of the Debtor’s financial affairs and to promptly liquidate assets such as the New York apartment as appropriate.”

The odds that Rudy just got himself a financial colonoscopy without anesthesia just went way up. (Sorry about your breakfast!)

The Gateway Pundit

The Gateway Pundit (TGP) is one of the most popular, least reliable sources of far right “news.” Despite the fact that it is pure spam, the site is hugely influential on the right, garnering a reported 29 million impressions last month. And so, when it flogged lies about Freeman and Moss in the aftermath of the 2020 election, people listened. The women faced waves of harassment and death threats, lost their livelihoods, and were even forced to flee their homes.

In December of 2021, they filed a defamation suit in Missouri state court against TGP, Jim Hoft, along with Jim Hoft and his twin brother Joe, who together produce much of the content on the site. As with Giuliani, the defendants engaged in extended shenanigans, including an abortive attempt to get the case removed to federal court and a doomed counterclaim against Freeman, Moss, and their lawyers for making public comments on the lawsuit. And like Giuliani, when it became clear that their efforts to derail the case would fail, TGP declared bankruptcy.

The bankruptcy was filed in Florida on April 24, 2024, despite the fact that TGP only registered to do business in the Sunshine State on April 18.

While most companies who file for bankruptcy are insolvent, TGP generates millions of dollars in revenue every year and has assets worth more than 22 times its current debts. Its only major liabilities are the Freeman suit and another defamation claim filed by Eric Coomer, a former employee of Dominion Voting Systems who also found himself in the conspiracy crosshairs. TGP proposed to pay its creditors three years net income in satisfaction of all claims, requiring the plaintiffs to drop their suits against the Hoft brothers. The Hofts would surrender none of their personal assets, effectively using the business bankruptcy to eliminate their personal liability.

But that is not what bankruptcy is for, and Judge Mindy Mora was having none of it.

That viewpoint conflates TGP’s liability with Hoft’s and begs the question of how reorganization is supposed to benefit TGP, rather than Hoft. Although it is difficult to tell where TGP ends and Hoft begins, Hoft is a separate co-defendant in the State Court Litigation who possesses or controls significant assets accrued with TGP’s funds. Those assets include the Jensen Beach condo (purchased for just under $800,000) and the investment accounts (with a balance of over $1,000,000). It is difficult to envision a consensual plan (much less post-confirmation tranquility) if those assets were effectively squirreled away without creditor consent, nor would the plan pass muster.

On Thursday, Judge Mora booted TGP out of bankruptcy in an order almost as scathing as the one issued by Judge Lane.

“This Court’s only task in this case is to determine whether the debtor, a business entity wholly owned and run by one person, has demonstrated a valid reorganizational purpose for chapter 11 bankruptcy motivated by good faith intent,” she wrote. “The answer, in short, is no, it has not.”

The order is full of delightfully snarky footnotes. The court observed that “It is possible that TGP owes back taxes due to its failure to timely disclose its status as a foreign entity conducting business within the state of Florida.” The judge noted that TGP purchased the Florida condo where Hoft lives and the Porsche he drives “pursuant to an undocumented, interest-free loan.”

She also remarked that TGP requested anonymity on behalf of its reporters, “despite having published personal identifiable information, including home addresses, of the State Court Plaintiffs.”

In the end, the court refused to allow itself to be used so that Hoft could defame private citizens and then fob them off with pennies on the dollar compared to a likely jury award.

“TGP remains both balance sheet and cash flow solvent. There is no present financial distress, no looming foreclosure sale, no prospect of a market crash,” Judge Mora wrote. “There is only the State Court Litigation in which TGP must defend itself. That’s not a basis for bankruptcy relief; it’s the justice system in operation.”

God bless. Time for justice. TGP and the Hofts can now go back to Missouri and explain to a jury why it was totally fine to publish lies about Freeman and Moss written by a 22-year-old “reporter” whom the TGP staff strongly suspected was not credible. And Rudy can spend the rest of his miserable life watching his assets be sold off to pay his creditors.

It couldn’t happen to a more deserving bunch of guys.

[Giuliani Bankruptcy / TGP Bankruptcy]