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Tag: bankruptcy
Rudy Giuliani

Bankrupt Rudy Giuliani's Legal Troubles Keep Getting Worse

In a bankruptcy court filing on Friday, February 16, a law firm representing unsecured creditors for former New York City Mayor Rudy Giuliani demanded information about his donors. Giuliani recently filed for bankruptcy after being ordered to pay $148 million in damages to former Georgia election workers Ruby Freeman and Shaye Moss, who sued him for bankruptcy.

But Giuliani's financial problems could become even worse, as he is also facing a lawsuit from former employee Noelle Dunphy (who accused him of rape and is seeking $10 million in damages for allegations that include sexual assault, wage theft and harassment). And Giuliani is still a co-defendant in Fulton County, Georgia District Attorney's election interference/RICO case against former President Donald Trump.

According to Bloomberg Law reporters Evan Ochsner and Randi Love, "Rudolph Giuliani's creditors, as well as the judge overseeing his bankruptcy, are demanding details about who is paying his legal fees…. Gary C. Fischoff of Berger Fischoff Shumer Wexler & Goodman LLP, one of Giuliani's bankruptcy lawyers, said during a court hearing Friday that Giuliani hadn't contributed to the fund."

Oschsner and Love add, "But Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York pushed for a definitive answer, in writing…. Philip C. Dublin of Akin Gump Strauss Hauer & Feld, representing a committee of Giuliani's unsecured creditors, said Friday that the committee wants an itemized account of where the money came from, how it's managed, and how it's disbursed."

Meanwhile, Giuliani and his lawyers are, according to Law & Crime reporter Colin Kalmbacher, responding to Dunphy's lawsuit by attacking her credibility.

But Justin T. Kelton, an attorney for Dunphy, told Law & Crime, "The assertions by Mr. Giuliani and his representatives sound like more like wishful thinking than sober analysis. Unlike Mr. Giuliani, no court has ever found that Ms. Dunphy made any misrepresentation."

Kelton added, "Furthermore, Ms. Dunphy has already come forward with substantial evidence in support of her allegations, and her sworn complaint speaks volumes. Mr. Giuliani's attacks on Ms. Dunphy are both inappropriate and extremely ironic coming from someone with his track record."

In addition to $10 million, Dunphy is seeking other unspecified damages in her lawsuit against Giuliani.

Kalmbacher notes, "The latest filing in the case occurred in early January. That's when Dunphy’s lawsuit was stayed pending the resolution of Giuliani's bankruptcy proceedings in the Southern District of New York."

Reprinted with permission from Alternet.

Federal Court Strikes Down Alex Jones’ Bankruptcy Petition

Federal Court Strikes Down Alex Jones’ Bankruptcy Petition

Far-right conspiracy theorist and Infowars host Alex Jones has tried to paint himself as a martyr for both the First Amendment and the Seconnd Amendment, but the courts haven’t agreed — finding that he crossed a line by bullying families of the Sandy Hook Elementary School victims and claiming that they were part of a “false flag” operation. Now Jones has suffered another legal defeat, this time involving his bankruptcy claims.

On Friday, June 10 in Texas, according to the Associated Press, U.S. Bankruptcy Judge Christopher Lopez dismissed a bankruptcy protection case involving three companies that Jones controls: InfoW LLC, Prison Planet TV and IW Health.

“The judge's action allows the parents' defamation lawsuits against Jones to continue in Texas and Connecticut, where trials are pending on how much he should pay families after judges in both states found Jones and his companies liable for damages,” AP reports. “The families' lawsuits say they have been subjected to harassment and death threats from Jones' followers because of the hoax conspiracy. Jones, based in Austin, Texas, has since said he believes the shooting did occur.”

The Sandy Hook tragedy occurred in Newtown, Connecticut on December 14, 2012, when gunman Adam Lanza shot and killed 26 people — 20 of them children — before killing himself. Jones, on his show, pushed the nonsense conspiracy theory that the Sandy Hook massacre was a false flag operation designed to attack the Second Amendment rights of gun owners. And the families of the victims suffered a great deal of abuse, according to the defamation lawsuits against Jones, when his followers took his baseless claims seriously.

Earlier this year, Jones agreed to a settlement in the lawsuit from relatives of children who were killed in the Sandy Hook massacre, saying he would pay $120,000 per plaintiff — an offer that they rejected.

InfoW LLC, Prison Planet TV and IW Health filed for bankruptcy protection on April 17. Never Trump conservative Jonathan V. Last, in an article published by The Bulwark on April 30, slammed Jones’ bankruptcy filing as a sleazy maneuver designed to protect his net worth.

AP notes that although the Sandy Hook families recently agreed to drop InfoW LLC, Prison Planet TV and IW Health from their defamation lawsuits, the “lawsuits will continue against Jones himself and his largest moneymaking company, Free Speech Systems.”

According to AP, “The families and the U.S. Trustee’s Office — a Justice Department agency that oversees bankruptcy cases — had questioned the legitimacy of the three companies' bankruptcy filing and sought to throw out the case, saying it was only a tactic to delay the lawsuits. Jones' lawyers denied the allegations.”

Reprinted with permission from Alternet.

Paper Source Files For Bankruptcy, Leaving Small Businesses in the Lurch

Paper Source Files For Bankruptcy, Leaving Small Businesses in the Lurch

Although one in four American seniors will live into their 90s, it looks like you may have to find a new retailer for greeting cards and birthday gifts. Paper Source, a popular Chicago-based stationery chain, has officially filed for bankruptcy -- and the brand has made a lot of smaller shops pretty ticked off in the process.

When filing for bankruptcy, individuals and couples will choose between Chapters 7 and 13. But for businesses, Chapter 11 is typically the go-to. That's true in Paper Source's case, which means that the company can continue to operate while it reorganizes its debts. Prior to the COVID-19 pandemic, Paper Source had undergone rapid expansion thanks, in part, to the brand's decision to buy 27 leases from Papyrus, its bankrupt rival in the stationery world. While the company grew to over 160 different stores nationwide before last spring, it has since closed 11 of those brick-and-mortar shops and has now followed in Papyrus's footsteps.

According to court filings, the pandemic took a major toll on the company. It's worth noting that it takes just 0.05 seconds for someone to form an opinion about a website -- and because parties and celebrations were considered non-essential last year, it's not exactly surprising that consumers opted not to buy Paper Source products online. Although e-commerce sales did grow out of necessity, in-store retail once accounted for 83% of the company's sales. The push to drive customers to the website clearly hasn't been enough to recoup the losses incurred due to extended closures, capacity restrictions, and rescheduled events. In fact, sales took a 32% dive last year, despite the fact that some of the building owners of Paper Source stores agreed to reduce rent payments during the pandemic.

Paper Source plans not only to keep 147 of its stores open during the reorganization but also has a stalking-horse bid lined up to potentially buy the company's assets. It's likely that MidCap Financial will provide $16.5 million in financing when the company goes up for auction in mid-April. But while lenders still see value in the brand, the company has made its fair share of enemies leading up to the bankruptcy filing.

According to social media and a report published by Bloomberg, Paper Source actually placed some "unusually large orders" with smaller greeting card suppliers in the months and weeks leading up to its bankruptcy filing. Unfortunately, the bankruptcy filing puts those payments to small businesses on hold -- perhaps indefinitely -- which means many have been left in the lurch. A statement from Janie Velencia, the owner of The Card Bureau, revealed that Paper Source ordered $5,000 worth of merchandise within 20 days of the company's bankruptcy filing with an additional $10,000 worth of orders just weeks prior to that. Velencia noted that Paper Source ordered more from The Card Bureau in only 60 days than the company had throughout the entire year of 2020. Now, Velencia is waiting on $15,000 from Paper Source that might never come. Steel Petal Press, a greeting card maker based in Paper Source's hometown of Chicago, also has five outstanding invoices from the bankrupt company that might never be paid.

Reportedly, vendors received larger orders after the 2020 holiday season because Paper Source was looking to stock the 27 stores it had acquired from the Papyrus lease takeovers. And while the orders placed closest to the bankruptcy filing will supposedly receive priority, according to Paper Source Chief Executive Officer Winnie Park, some small business owners aren't holding their breath. In fact, any orders placed prior to that 20-day pre-filing mark might yield only pennies on the dollar after a prolonged legal fight. Some feel it just isn't worth it, with many choosing to speak out on social media and rely on loyal customers to make up a small portion of their losses.

The pandemic has clearly taken its toll on the greeting card industry, but the actions of Paper Source prove that there's little recourse for smaller makers and vendors who get burned. Although Paper Source might not be closing all of its doors any time soon, it may be worth going directly to the source for your stationery needs instead of a large chain.