Giuliani Firms Had Potential Conflict of InterestA pair of companies owned by Rudy Giuliani represented both a debtor and a creditor in a recently concluded bankruptcy proceeding, a potential conflict of interest that wasn't disclosed to the federal judge overseeing the case, records show. The matter could heighten pressures on Mr. Giuliani's presidential campaign to be more forthcoming about the candidate's stable of businesses, their clients and the services they provide.
In September 2005, a subsidiary of closely held Giuliani Partners LLC signed a consulting agreement with Delta Air Lines Inc. to provide restructuring advice during the carrier's bankruptcy reorganization, drawing more than $5 million in fees for the service. Then, in January 2006, a separate Giuliani Partners division -- Giuliani Security & Safety -- signed a $2 million consulting deal with Command Security Corp., a tiny provider of security-guard services that had been left with $1 million in unpaid bills when Delta and Northwest Airlines Corp. filed for bankruptcy-court protection in September 2005.
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Under federal bankruptcy law, Giuliani Partners and Giuliani Capital Advisors were required to fill out a form stating any "connections with Interested Parties" -- which would include work being performed simultaneously for a creditor and the debtor in the case. The company was required to file such an affidavit in court, and update it periodically as the Delta case unfolded. The company never disclosed to the court its security division's ties to Command Security.
http://online.wsj.com/public/article/SB117850248912794086-vxMpHHx7pBifLO3tP6Q_gru9lGw_20080506.html?mod=blogssee also
http://www.huffingtonpost.com/2007/05/07/giulianiowned-firms-repr_n_47828.html