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A bankruptcy judge has ruled that Rudy Giuliani, the once-respected former mayor of New York City, can appeal the $146 million verdict after he was found liable of defaming two Georgia elections workers — if he uses pre-approved donors to pay the legal expenses, NBCNews.com reported. In December, an eight-person jury awarded Ruby Freeman and her daughter, Wandrea "Shaye" Moss, the multimillion-dollar judgment after Giuliani was found to have defamed them, which the mother-daughter duo said had changed their lives forever and caused them to be flooded with a torrent of racist and violent threats. Giuliani baselessly accused them of trying to commit fraud in Georgia as part of a multifaceted effort to overturn Donald Trump's 2020 election defeat. Giuliani filed for bankruptcy in New York in December after the federal judge in his Washington case ordered him to start paying the Georgia election workers. On Tuesday, the bankruptcy judge assigned to Giuliani's case in New York said the former mayor must seek the judge's approval before any third-party payment of fees and expenses. Those fees cannot come from Giuliani's existing assets, the judge said. "Any fees and expenses incurred by the Debtor and his advisors in the Freeman Litigation in connection with any Post-Trial Filings and the Notice of Appeal shall not be paid by, and shall not result in a claim against, the Debtor or his estate," U.S. Bankruptcy Judge Sean Lane wrote. In a court filing last week, Freeman and Moss noted that Giuliani's son was president of Giuliani Defense, a legal defense fund, and said it was "essential to obtain clarity on how the Legal Defense Funds were themselves funded." On Monday, Giuliani declared that he had not directly or indirectly donated any money to either of his legal defense funds.

The Archdiocese of Santa Fe is being accused of reneging on a promise to publicly post the names of clergy who were accused of child sexual abuse in claims submitted during its long-running chapter 11 bankruptcy reorganization, the Albuquerque Journal reported. Lawyers for a woman who contends she was first abused as a child in 1957 by the Rev. Richard Spellman say church officials are violating the terms of the bankruptcy settlement agreement that ended the case in December 2022. The archdiocese agreed to pay $121 million to 400 or so sex abuse survivors who submitted claims in the case. But archdiocese attorneys have disputed the notion that the settlement also requires disclosure of alleged perpetrators whose names surfaced during the confidential claims process. They contend that the archdiocese is required by the agreement to list on its website the names of "all known past and present clergy perpetrators of ASF who have been determined by the Archbishop in consultation" with an independent review board to be credibly accused of sexual abuse. Levi Monagle, one of the attorneys representing Mela LaJeunesse, filed a motion Tuesday disputing that interpretation and asked the U.S. Bankruptcy Court in New Mexico to intervene.

The Reno City Center project, located at the old Harrah's building, has filed for chapter 11 protection, 2News.com reported. The filing, dated February 16th, was made through the U.S. Bankruptcy Court in the District of Nevada and lists Reno City Center LLC as a Delaware limited liability company. Last September it was reported that the project was approved for a non-restrictive gaming license and an on-premises alcohol license for PKWAY Tavern. There's no mention within the bankruptcy filing whether the above licenses are affected, or whether the entire project will stop, or move forward. The voluntary petition mentions numerous creditors.

Supreme Court Justice Samuel Alito on Friday temporarily halted the Boy Scouts of America's $2.46 billion settlement of decades of sex abuse claims, which is being appealed by a group of 144 abuse claimants, Reuters reported. Alito's brief order freezing the settlement gives the court more time to decide a Feb. 9 request by these abuse claimants to block the settlement from moving forward. They contend the deal unlawfully stops them from pursuing lawsuits against organizations that are not bankrupt, such as churches that ran scouting programs, local Boy Scouts councils and insurers that provided coverage to the Boy Scouts organization. Justice Alito stepped in to halt the settlement because he handles certain requests involving cases from a group of states including Delaware, where the Boy Scouts matter was decided. The settlement involves more than 82,000 men who have said they were abused as children by troop leaders while in the Boy Scouts. Doug Kennedy, an abuse survivor who co-led the official committee representing abuse claimants in the bankruptcy, called the delay a "horrible" result. Survivors have already waited for decades for their abuse to be addressed, and 86% of abuse survivors voted to support the Boy Scouts settlement in bankruptcy court, Kennedy said. The trustee in charge of administering the Boy Scouts settlement, retired bankruptcy judge Barbara Houser, said Alito's order will suspend all work on the settlement, including evaluating claims and mailing checks to abuse survivors. The settlement trust has already paid nearly $8 million to more than 3,000 men. The Boy Scouts of America noted that Alito's order was only a short-term measure and said that it hopes the Supreme Court will swiftly deny the request for a longer pause, which would "inflict severe harm on both the Scouting movement and Scouting-abuse survivors."

Small businesses struggling to find funding have turned to alternative options such as merchant cash advances in recent years. Such deals have threatened the existence of some of these mom-and-pop operations, WSJ Pro Bankruptcy reported. More than 100 businesses that filed for chapter 11 since the start of 2023 have attributed their bankruptcies at least partly to cash advances, up from at least 68 for 2022 and 16 for 2021, according to a Wall Street Journal review of court records. A Brooklyn clam bar visited by celebrity chef Anthony Bourdain, Brooklyn retail chain Showfields, known for showcasing local vendors and artists, and, last week, Florida-based countertop maker International Granite & Stone are among those restructuring in chapter 11. These merchant cash financiers, estimated to be about 100 participants, provided $19 billion in 2019, up from $8.6 billion in 2014, according to estimates in a 2023 report published by the U.S. Consumer Financial Protection Bureau. The growth has prompted the CFPB to try to tighten regulation on the industry, leading the cash providers to fight back in a lawsuit against the regulator. Since the COVID-19 pandemic government financial aid dried up, some companies have sought capital from financiers that provided a lump sum, in exchange for a share of future revenues of the businesses, plus fees. To get repaid, the cash providers can make regular, including daily, withdrawals from businesses’ bank accounts. The popular financing comes at a cost. A 2019 Federal Reserve report said the equivalent annual percentage rates for cash advances can exceed 80% or “even rise to triple digits.” “We frequently see this…that in the last days before a bankruptcy filing, a company got in over its head with these merchant cash advances,” said Bankruptcy Judge Stacey Jernigan during a recent American Bankruptcy Institute event. “They very often seem to be the ones that caused the bankruptcy,” Judge Jernigan said, describing the financing as “pricey” or even “onerous.”

Petersen Health Care Inc., which runs around 100 nursing homes and assisted living facilities in the Midwest, is preparing to file for chapter 11 bankruptcy in the coming weeks, Bloomberg News reported. The Peoria, Ill.-based company has had more than a dozen of its locations put into receivership in recent weeks, according to court papers. In late January, a court ordered several of the company’s facilities to be put into receivership after lenders alleged that the company had defaulted on its debt. On Tuesday, two more of its facilities were put into receivership. Senior living companies have faced immense pressures since the COVID-19 pandemic began. Many struggle with persistent staff shortages and higher costs for labor, supplies and insurance, and inadequate government reimbursements.

U.S. prosecutors justified one of the largest criminal penalties in U.S. history, saying Binance Holdings Ltd. willfully violated the nation’s economic sanctions laws and left the financial system vulnerable to “those who seek to exploit our system for their own gain,” Bloomberg News reported. The crypto trading company pleaded guilty late last year to anti-money laundering and sanctions violations and agreed to pay $4.3 billion in penalties. In a sentencing memo filed Friday in federal court in Seattle, U.S. prosecutors urged a federal judge to accept the plea deal. “In sum, given the nature and seriousness of Binance’s misconduct — it was intentional and led by senior executives, with hundreds of millions of dollars of collateral consequences,” the penalties in the proposed plea agreement are appropriate, they wrote. The plea deal also requires monitoring of the company for up to five years. Prosecutors say that Binance’s refusal to register as a so-called money services business, one that transmits or converts money, and its failure to implement an effective anti-money laundering program left “Binance, its customers, and the U.S. financial system vulnerable to those who seek to exploit our system for their own gain.” Binance has admitted that it allowed transactions with Hamas and other terrorist groups on the platform.

FTX investors sued Sullivan & Cromwell, accusing the law firm of aiding illicit schemes that helped advance a multi-billion dollar fraud before the crypto exchange’s collapse, Bloomberg News reported. Sullivan & Cromwell’s services “went well beyond those a law firm should and ordinarily provides,” the investor complaint said. “Lawyers were eager to craft not only creative but misleading strategies that furthered FTX’s misconduct.” The lawsuit filed on Friday on behalf of a proposed class of FTX customers adds to scrutiny of the elite Wall Street law firm that has acknowledged working on 20 legal matters for FTX and its founder Sam Bankman-Fried in the 16 months before the exchange’s 2022 implosion amid reports of a liquidity crisis. The Moskowitz Law Firm, which is behind actions against Tom Brady and other celebrity endorsers of FTX, brought the suit in Miami federal court. The firm “actively participated” in the FTX fraud through legal work that gave it deep insight into the exchange’s inner workings, investors allege. Firm lawyers knew where customer money was held and about the “untruthful and fraudulent conduct and misappropriation” of the money, the investors claim. The lawsuit makes Sullivan & Cromwell the second law firm to face an investor litigation over allegedly aiding and abetting the FTX fraud. Fenwick & West, a Silicon Valley law firm which worked as the crypto exchange’s main corporate counsel, is facing a separate action along with venture and private equity firms such as Sequoia Capital, Thoma Bravo and Paradigm. Bankman-Fried in November was convicted of fraud and conspiracy for siphoning customer money into an affiliated hedge fund for risky investments, political donations, and expensive real estate.

Liquidators of companies linked to the 1Malaysia Development Bhd scandal have filed for chapter 15 under the U.S. Bankruptcy Code, as they look to recover assets, Bloomberg News reported. A petition listing 1MDB Energy Holdings Ltd, Platinum Global Luxury Services Ltd, Aabar International Investments PJS Ltd, Blackrock Commodities (Global) Ltd, and Alsen Chance Holdings Ltd — all registered in the British Virgin Islands — was submitted in the Southern District of Florida court, dated Feb. 15. Liquidators said that the companies were subject to proceedings in the British Virgin Islands and made the U.S. petition because they hope to obtain information on the misappropriation of funds, according to the documents. Malaysia’s 1MDB investment fund became the center of a multibillion-dollar scandal that has spawned investigations around the world into deal-making, election spending and political patronage under former Prime Minister Najib Razak. The filing said that all five firms in question “acted as conduit for funds” from 1MDB to other entities and individuals.

A Virginia bank says it will delay plans to auction off land at West Virginia Gov. Jim Justice’s posh resort in an attempt to recover more than $300 million on defaulted business loans by the governor's family, the Associated Press reported. In a filing Friday in Greenbrier County Circuit Court, Carter Bank & Trust of Martinsville, Va., said that it will reschedule the March 5 auction to a later date, the Charleston Gazette-Mail reported. The bank also asked that a hearing set for Tuesday be postponed on a request by the Greenbrier Sporting Club in White Sulphur Springs for a preliminary injunction against the bank. Carter Bank published a legal notice in the Charleston Gazette-Mail on Feb. 6 announcing the March 5 auction in Lewisburg involving land at the Greenbrier Sporting Club. Carter Bank has said that it would “aggressively” pursue $302 million it was owed in principal debt, plus interest and fees, from companies owned by the governor’s family. In its Friday filing, Carter Bank said it “understands that homeowners within the Greenbrier Sporting Club development are also very interested in this matter and may be considering undertaking action of their own.” The sporting club is a private equity club and residential community that opened in 2000. Justice bought the resort out of bankruptcy in 2009. He began serving the first of his two terms as governor in 2017.