Bankruptcies, Background Checks, and Rudy Giuliani

A necessary step in making any executive hire or vetting potential investment partners is running a background check. Past behavior – especially involving financial or criminal sectors – is a leading indicator of risk for future issues.

So what happens when a background check surfaces a bankruptcy?

A bankruptcy or any unmanageable debt can be an indicator of a subject’s inability to handle financial responsibilities and commitments. Our reports surface both personal and corporate bankruptcies, and together they can serve as a warning that entering into any kind of deal can pose a potential risk. 

First things – what counts as a bankruptcy on a background check?

Any time an individual or an entity declares bankruptcy, that will show up on a background check. There is a common misconception that bankruptcies only show up on your report for seven years. While this is true under the FCRA seven-year law for reporting negative information on a background check, it does not apply to pre-investment due diligence. Our reports can surface bankruptcies filed beyond the seven year threshold, and in fact frequently surface such events around the 2008 financial crisis. 

What to consider when due diligence uncovers a bankruptcy

Like any flag in our due diligence platform, a bankruptcy should be taken under careful consideration when making an important decision like a shared investment or hiring an individual to be an executive in your organization. The inability to manage one’s debt either personally or professionally can indicate ongoing troubling financial behavior. As always, there are a number of factors to consider such as how closely the individual was to making key decisions relevant to the bankruptcy, how long ago the filing was, and even more macroeconomic circumstances that might affect their business (i.e., if a thriving business was curtailed by an economic downturn, global pandemic, etc.). In short, a bankruptcy warrants careful consideration over whether that individual or entity is worth placing one’s trust and investment in.

Bankruptcy and the case of Rudy Giuliani

To make this more concrete, we decided to dive into a recent and widely publicized bankruptcy filing: Rudy Giuliani. The former Mayor of New York filed for bankruptcy in December of 2023, after he was ordered to pay nearly $150 million in damages to two former Georgia election workers as part of the failed efforts to overturn the 2020 election in favor of former President Donald Trump.

While Giuliani, now 79, likely wouldn’t be applying for work anytime soon, we wanted to take a look at what an Intelligo background check may help us learn about him, and see where the risk factors likely appear.

First off, when we ran this report in early January 2024, our AI-powered platform surfaced 296 total flags, three of them red flags and 293 yellow. On average, our reports come back with just under three flags. While we would expect any person in the public eye, particularly a former politician, to raise more flags particularly within the adverse media vertical, these numbers are still two to three times larger than analogous figures in the public sphere.

His red flags emerged under the legal category, with the bulk of his yellow flags under news and adverse media (to be expected given his trajectory in the public eye). Under his legal red flags, we can see a number of legal cases including his own bankruptcies, and incidents where he is involved in ongoing cases. 

Our bankruptcy coverage is a comprehensive search conducted of bankruptcy records, encompassing both personal and business filings. The search results provide a number of details including debtor names and addresses, additional debtors, file numbers and dates, court locations, asset and liability amounts, as well as the type of bankruptcy. Results can be limited based on jurisdiction specific regulation. In this case, we can see that Giuliani has filed for bankruptcy once in December 2023.

Bankruptcy is only part of the picture for Giuliani’s report. If we dive further into the cases he’s been involved in, he has been a defendant a total of 80 times between January 1991 and December 2023. While Giuliani was a lawyer himself, we would not expect to see him listed as a defendant in cases, but rather as an attorney. The sheer number of times he has had suits or charges brought against him warrants further consideration. 

All in all, the report reads clearly: with 296 flags including the financial risk involved in bankruptcy itself, the report as a whole reads as a red flag. To understand your investment risks and see how bankruptcies are handled in Intelligo background checks, book a demo with our team today.