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Rudolph Giuliani must pay the $148 million debt he owes two Georgia election workers — despite his bankruptcy, the pair said in a new complaint, Bloomberg Law reported. The judge overseeing the former New York City mayor’s chapter 11 case shouldn’t allow Giuliani to use bankruptcy to avoid the debt because bankruptcy law blocks the discharge of debt incurred through “willful and malicious injury,” the election workers, Ruby Freeman and Shaye Moss, said in a filing Friday. Freeman and Moss were awarded $148 million in December after a court found Giuliani liable for defaming the pair by accusing them of rigging 2020 election results for Joe Biden. He filed for bankruptcy shortly after. A ruling in favor of Freeman and Moss in the bankruptcy case would prevent Giuliani from clearing what is by far his biggest debt. Giuliani has reported having $10.6 million in assets against almost $153 million in liabilities.

Bankrupt cryptocurrency exchange FTX received court approval to sell its stake in Anthropic, an artificial-intelligence startup in which Amazon.com and Google late last year agreed to invest billions of dollars, WSJ Pro Bankruptcy reported. Judge John Dorsey in the U.S. Bankruptcy Court of Wilmington, Del. approved the sale on Thursday after FTX reached a compromise with a group of customers who had objected to the sale. FTX invested $500 million in Anthropic in 2021 and holds a stake of about 7.8% in the company. In a court filing earlier this month, FTX said that “given the increased interest in AI and large language models, there has been significant appreciation in the value of the Anthropic shares.” In September, Amazon said it would be investing up to $4 billion in Anthropic. And in October, Google agreed to invest up to $2 billion in Anthropic, building on its earlier investment in the AI company. By getting approval for the sale procedures, FTX said it can unload the shares at “the most optimal and appropriate time.” Read more. (Subscription required.)

In related news, the FTX estate has agreed to drop a lawsuit that sought to claw back at least $323.5 million from the original owners of the bankrupt cryptocurrency exchange’s European unit, WSJ Pro Bankruptcy reported. Under a proposed settlement, the two main targets of the lawsuit—FTX Europe co-founders Patrick Gruhn and Robin Matzke—agreed to buy back the unit’s assets for $32.7 million. Details of the proposed settlement emerged in a Thursday court filing from the FTX estate. The deal still needs to be approved by a judge. The proposed settlement marks a retreat by the FTX bankruptcy estate, led by Chief Executive John J. Ray III. The suit against the former owners of the European unit was one of around a dozen lawsuits filed by FTX seeking to claw back billions of dollars from former FTX insiders and companies that did business with FTX under the leadership of its former CEO and founder, Sam Bankman-Fried. In recent months, the rising value of cryptocurrencies and FTX’s stake in artificial-intelligence startup Anthropic have made it less imperative for the estate to claw back funds. A lawyer for FTX said in court in January that the estate expected to repay customers in full. Filed in July, FTX’s lawsuit alleged that Bankman-Fried massively overpaid for Digital Assets DA AG, the Swiss firm that became FTX Europe, when FTX bought it for more than $376 million in a series of transactions in 2020 and 2021. At the time, Bankman-Fried was eager for his crypto exchange to become licensed in the European Union. Read more. (Subscription required.)

A New Jersey-based police training firm singled out in a government watchdog report for its “vulgar” and “unconstitutional” lessons has since relocated to Florida and declared chapter 11 bankruptcy as officials in at least nine states move to ban Street Cop Training from instructing officers, NJ.com reported. New Jersey Attorney General Matthew Platkin this week directed any Garden State police officers who attended Street Cop’s 2021 conference in Atlantic City to undergo mandatory re-training in Trenton in March and steer clear of the company going forward. That order followed a scathing New Jersey State Comptroller report, released in December, that found conference speakers “promoted likely illegal tactics, glorified violence and demeaned women and minorities.” The report drew national attention as videos spread of invited speakers remarking on the size of their penises, mocking suspects and motorists with lewd images and memes and complaining about police oversight. Now, several states have prohibited officers from attending Street Cop trainings, including Minnesota, Missouri, Maryland, Illinois, California, Oregon, Nevada, Michigan and New Jersey, according to court filings. Facing a shrunken customer base and more investigations, Street Cop founder Dennis Benigno, a former Woodbridge police officer, filed for chapter 11 bankruptcy for the firm in a Florida federal court earlier this month, citing continued “harassment from the State of New Jersey” among the sources of the firm’s financial woes.

A U.S. judge said that Barclays must face part of a proposed class action by shareholders over the British bank's sale of $17.7 billion more debt than regulators had allowed, Reuters reported. U.S. District Judge Katherine Polk Failla in Manhattan said that shareholders adequately alleged that Barclays' failure to disclose the absence of internal controls to catch the error was a material omission of fact. She also said shareholders can try to prove that Barclays and several officials, including former Chief Executive Jes Staley, were "actionably reckless" in reassuring them that the bank was complying with federal securities laws. The judge nonetheless said the shareholders could not pursue a securities fraud claim over statements that Barclays made after the overissuances were discovered.

Disgraced cryptocurrency entrepreneur Do Kwon should be extradited to the U.S. to face trial on fraud charges, rather than to his native South Korea, a court in the tiny Balkan country of Montenegro has ruled, the Wall Street Journal reported. Kwon’s lawyers have three days to appeal the ruling by the High Court in the Montenegrin capital of Podgorica, a spokeswoman for the court said Wednesday. The appeals court will have the final word in the case, she added. A local lawyer for Kwon, Goran Rodić, called the ruling illegal and pledged to appeal. Kwon, the creator of the failed TerraUSD and Luna cryptocurrencies, has previously denied committing fraud. Kwon has been at the center of a tug of war between the U.S. and South Korea ever since he was arrested in March 2023 at the Podgorica airport while attempting to board a private jet to Dubai with a fake Costa Rican passport. Both the U.S. and South Korea have sought to prosecute him on charges stemming from the May 2022 collapse of TerraUSD and Luna. The crash erased some $40 billion in value from the crypto markets, hurt thousands of investors worldwide and triggered a chain reaction that caused other digital-currency firms to topple into bankruptcy. Last year, federal prosecutors in New York charged Kwon with eight criminal counts of fraud. The Justice Department alleged that Kwon misled investors about the stability of TerraUSD, an algorithmic stablecoin that used financial engineering to maintain a value of $1 a coin. A Stanford University-educated entrepreneur, Kwon had hyped TerraUSD as the future of money and derided critics who called it potentially unstable. The Securities and Exchange Commission has also sued Kwon and his company, Terraform Labs, over securities fraud in a civil case stemming from the TerraUSD and Luna collapse. Lawyers for Terraform Labs have denied the SEC’s allegations. Read more. (Subscription required.)

FTX founder Sam Bankman-Fried is expected to return to a New York courtroom Wednesday for a rare appearance since his November conviction over a multibillion-dollar fraud on cryptocurrency customers, Bloomberg News reported. Bankman-Fried is slated to answer questions from a federal judge as to whether he is aware of potential conflicts of interest for the lawyers he hired last month to represent him at sentencing on March 28. His new attorneys also represent another crypto mogul, former Celsius Network Ltd. Chief Executive Officer Alex Mashinsky. Earlier this month, prosecutors asked U.S. District Judge Lewis Kaplan to question Bankman-Fried about possible conflicts for attorneys Marc Mukasey and Torrey Young. The government wants to determine if Bankman-Fried is willing to waive his Sixth Amendment right to effective assistance of counsel, given the lawyers represent Mashinsky in a separate criminal case related to the collapse of Celsius. Bankman-Fried faces as long as 20 years in prison for the most serious charges for which he was convicted. Prosecutors noted Mashinsky has partially blamed Celsius’s bankruptcy on actions taken by Alameda Research, a hedge fund linked to Bankman-Fried’s FTX crypto exchange, and that the lawyers’ use of some records could be limited. When Celsius filed for bankruptcy in 2022, Alameda was among its top creditors, court filings show.

The families of Sandy Hook school shooting victims voted overwhelmingly in favor of a plan to wrap up Alex Jones’ bankruptcy proceedings by liquidating the right wing talk show host’s assets, Bloomberg Law reported. Jones’ general unsecured creditors — comprised mostly of Sandy Hook families holding about $1.5 billion in defamation judgments against the famed conspiracy theorist — voted 100% in favor of a chapter 11 plan that would methodically liquidate and redistribute his property and cash, while preserving potential legal actions against parties affiliated with Jones and his Infowars program. An official committee appointed to represent Jones’ unsecured creditors notified the U.S. Bankruptcy Court for the Southern District of Texas on Feb. 16 that of 23 liquidation plan ballots distributed to creditors, it received 21 back — all supporting the committee’s liquidation proposal. The vote indicates the creditors’ preference over a competing plan submitted by Jones that would allow him to reorganize by preserving parts of his media empire and paying the group at least $5.5 million a year over 10 years. His plan would provide additional creditor recoveries out of disposable income from Jones’ bankrupt Infowars parent company, portions of Jones’ personal income, and the proceeds from selling various personal assets.

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.