​Court backs law firm's deal with Girardi plaintiffs, paving way for lawsuit

The Stow family attorney Thomas Girardi delivers his closing argument in a civil trial in a lawsuit brought by his client San Francisco Giants fan Bryan Stow against former Los Angeles Dodgers owner Frank McCourt in Los Angeles
Thomas Girardi in Los Angeles, June 26, 2014. REUTERS/Irfan Khan/Pool
  • Edelson firm, insurer to pay at least $2 million to families of Lion Air crash victims
  • Draft lawsuit presented to judge names "Real Housewives" star Erika Jayne Girardi

(Reuters) - A federal judge in Chicago on Wednesday signed off on a plan for plaintiffs law firm Edelson PC and its insurer to pay five families of the victims of the 2018 Lion Air crash at least $2 million, making up for the settlement funds they never received from their former lawyer, Tom Girardi.

The decision by U.S. District Judge Thomas Durkin allows the Chicago firm to move forward with a proposed $50 million lawsuit against Girardi's wife, reality TV star Erika Jayne Girardi, and others, including former lawyers of Girardi's firm, Girardi Keese.

Under the deal approved Wednesday, the families of the Lion Air crash victims will assign whatever claims they have against Erika Girardi and others to the Edelson firm.

Damages recovered in a successful suit would first pay the attorney fees of the Wisner Law Firm, a Chicago firm that is now representing the five families, and recoup the costs for Edelson and its insurer, the proposal said. Any additional money recouped in the lawsuit would be divided between Edelson and the five families.

"We're very gratified" about the ruling, said Jay Edelson, founder and CEO of the Edelson firm.

Edelson said he would soon file a complaint based on the assigned claims, a draft of which alleges that Girardi Keese "was little more than a criminal enterprise, disguised as a law firm."

"We’re not going to file it tomorrow. It’s not going to be next month. We’re going to file it quickly," Edelson said.

Edelson has already accused the Girardis in a December 2020 lawsuit of using settlement money meant for the families of four victims of the 2018 Lion Air crash to bankroll a "glitz-and-glam" Hollywood lifestyle.

The new draft lawsuit, which was disclosed Tuesday in the firm's proposal to Durkin, accuses Erika Girardi of being the "frontwoman" of a larger racketeering conspiracy in which Girardi Keese and others allegedly stole more than $100 million from the firm's clients, co-counsel and others.

An attorney for Erika Girardi did not immediately respond to requests for comment on the allegations. Girardi's attorney has said the reality star is "completely innocent" of related claims.

Tom Girardi and Girardi Keese are not named as defendants in the draft complaint, as both are in bankruptcy proceedings, Edelson said. Tom Girardi has not responded to allegations about the Lion Air crash funds, although attorneys for him have acknowledged the settlement funds in question were not distributed.

(NOTE: This story has been updated with additional details on the agreement approved Wednesday.)

Read more:

Law firm asks judge to allow $50 mln lawsuit against Erika Girardi, others

Law firm says Erika Jayne Girardi case to shift to California

Girardi, firm forced into Chapter 7 liquidation as judge weighs appointing guardian

Judge sanctions Tom Girardi and his firm over missing $2M, suggests criminal inquiry

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David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at d.thomas@thomsonreuters.com and on Twitter @DaveThomas5150.