Edelson says Real Housewife Erika Girardi got money from Lion Air victims
(Reuters) - Law firm Edelson says financial records from the bankruptcy of famed plaintiffs lawyer Tom Girardi show that Girardi's estranged wife, reality television star Erika Girardi, received money misappropriated from victims of the Lion Air crash who were represented by her husband.
Edelson, which acted as local counsel to Girardi in the Lion Air victims' litigation against Boeing Co, leveled the new accusation against Erika Girardi in a brief filed on Tuesday in Tom Girardi’s Chapter 7 proceeding in federal bankruptcy court in Los Angeles.
In the filing, the law firm said that it had reviewed financial records provided by the Girardi bankruptcy trustee. Those records, it said, belied private assertions by the trustee’s special litigation counsel that Erika Girardi, a singer and star of The Real Housewives of Beverly Hills, had not received money that was owed to Lion Air victims.
“Far from foreclosing the possibility that Erika received settlement money from the Lion Air cases, [the records] showed the opposite: Money that belonged to the surviving widows and orphans of the victims of that plane crash had, in fact, been used to make payments for Erika or her companies,” the brief said.
Erika Girardi’s counsel, Evan Borges of Greenberg Gross, refuted the new Edelson accusation in an email statement. “I’ve never seen any evidence to support the allegation that Lion Air settlement money received by Girardi Keese was sent by GK to my client,” Borges said. The trustee in Girardi’s Chapter 7 bankruptcy, “never has alleged that Erika received Lion Air settlement money,” he added. “I don’t know what Edelson is referring to, and he has conveniently redacted or blacked out his alleged references in his brief to supposed evidence,” Borges said.
The trustee's special litigation counsel, Ronald Richards of Ronald Richards & Associates said Edelson's new assertion is unfounded. "They produced no evidence that showed any direct payments to Erika or her companies," he said. "It's all a big conjecture piled on maybes."
Edelson first blew the whistle on Girardi’s alleged embezzlement of millions of dollars from the families of victims of the Lion Air crash in December. The firm filed a suit in federal court in Chicago, claiming that instead of paying out settlement money to victims – and co-counsel fees to Edelson – Girardi and his wife were using victims’ money to prop up a glitzy façade.
Edelson also alerted the judge overseeing the Lion Air litigation against Boeing. That judge quickly found Tom Girardi and his firm to be in contempt and ordered them to fork over $2 million allegedly diverted from the firm's clients.
Litigation against Tom Girardi and Girardi Keese was stayed when they were forced into Chapter 7 proceedings in federal bankruptcy court in Los Angeles. Edelson name partner Jay Edelson and his colleagues nevertheless sought to continue their investigation of Erika Girardi in their suit against her in Chicago.
In October, Edelson filed a motion in Tom Girardi’s bankruptcy, seeking a ruling that the bankruptcy stay did not preclude the firm from pursuing Erika Girardi on behalf of Lion Air victims. (The firm reiterated that any recovery would go to the victims, not to Edelson.)
Erika Girardi’s lawyer countered that Edelson had no basis to pursue any claims in the Lion Air case. In a Nov. 2 brief in the Tom Girardi bankruptcy, Erika Girardi counsel Borges told U.S. Bankruptcy Judge Barry Russell of Los Angeles that “newly discovered evidence” had revealed that “the Illinois action is premised on illegal, unethical and unenforceable fee-sharing agreements between Edelson and [Girardi Keese].”
The brief alleged that Girardi’s Lion Air clients did not sign off on Edelson’s referral deal, invalidating the fee-sharing agreement at the heart of Edelson’s Illinois case against Tom and Erika Girardi. The bankruptcy trustee’s litigation counsel, Richards, tweeted that the Nov. 2 Erika Girardi filing was “a bombshell.”
Edelson’s brief Tuesday argued that Richards had teamed up with Erika Girardi’s lawyer in an attempt to shut down Edelson’s investigation, to the detriment of the Lion Air victims.
That outcome, the brief said, was bad for everyone: the Lion Air clients and all of the other creditors of Tom Girardi and Girardi Keese. “If it is only Edelson that will conduct a legitimate, non-conflicted investigation of what money Erika took — a fact that increasingly seems to be the case — that is all the more reason for the court to grant the motion” to allow Edelson to push on, despite the bankruptcy stay, the brief said.
Richards said in an interview that he has no “backdoor deal” with Erika Girardi, with whom he hopes to reach a voluntary settlement. He said he wants the investigation of Erika Girardi to be conducted in the bankruptcies, rather than in the Chicago litigation, because he has procedural concerns about Edelson’s right to sue based on the allegedly deficient client agreements.
“The guy who wears the white hat should have all of his ducks in a row before he goes around accusing other people,” Richards said.
Erika Girardi's counsel Borges also denied collusion with Richards. “Edelson is seeing monsters in the closet,” he said. “Edelson’s reply brief boils down to a distraction tactic to avoid having to answer for a blatantly unethical, illegal, and unenforceable fee-sharing agreement between his firm and [Girardi Keese].”
Jay Edelson acknowledged in a Twitter post that Erika Girardi and her counsel have not seen the records backing his firm's assertion in Tuesday’s brief that Lion Air client money flowed to her. Specific details are redacted in the public version of the filing. Edelson called on the bankruptcy trustee to release the financial records publicly – for the benefit of Erika Girardi and the vast public eager for details in this case.
Read more:
Lawyer must wait his turn to sue Erika Jayne Girardi, trustee says
Tom Girardi and reality star wife sued for alleged theft of Lion Air settlement funds
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