Bankruptcy judge OKs lawsuit against Erika Jayne Girardi

2017 American Music Awards – Arrivals – Los Angeles, California, U.S., 19/11/2017 – Singer and actress Erika Jayne. REUTERS/Danny Moloshok
  • Edelson PC sued Erika and Tom Girardi in December over settlement funds
  • Ruling allows misappropriation claims to proceed in federal court

(Reuters) - A bankruptcy judge in Los Angeles said Tuesday he will allow Chicago law firm Edelson PC to pursue claims against the estranged wife of plaintiffs lawyer Tom Girardi in a Chicago federal court.

U.S. Bankruptcy Judge Barry Russell during a Tuesday hearing said he was not weighing in on the merits of Edelson's misappropriation claims against "Real Housewives of Beverly Hills" star Erika Jayne Girardi, shooting down lawyers' efforts on each side to argue about the substance of the case.

"It may ultimately be relevant, but that’s something a judge in Chicago would deal with," Russell said.

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Edelson PC sued both Girardis in Chicago federal court in December, alleging they used settlement funds meant for the families of victims of the 2018 Lion Air crash for themselves.

The lawsuit triggered a flood of claims by Girardi's former partners and others that forced Girardi and his firm, Girardi Keese, into bankruptcy. Edelson's claims against Tom Girardi and the defunct firm have been paused due to the bankruptcy proceedings.

Edelson's motion to allow Edelson's lawsuit against Erika Girardi initially ran into opposition from Elissa Miller, the Chapter 7 trustee overseeing the estate of Girardi Keese. Last week, Miller dropped her opposition.

Evan Borges, a partner at Greenberg Gross representing Erika Girardi, said after the hearing that he will argue that Edelson PC had an "unethical and unenforceable" fee-splitting agreement with Girardi Keese.

Jay Edelson, the founder and CEO of Edelson PC, said in a statement he is "eager to get into discovery in our case and get to the bottom of this enormous fraud."

Read More:

Trustee green-lights lawsuit against 'Real Housewife' Erika Girardi

Lawyer must wait his turn to sue Erika Jayne Girardi, trustee says

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

Tom Girardi and reality star wife sued for alleged theft of Lion Air settlement funds

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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.