Girardi involuntary bankruptcy sought

LOS ANGELES -- Creditors of famed plaintiffs' attorney Thomas V. Girardi filed for his involuntary bankruptcy in the Central District of California on Friday, putting a quick halt to a state court hearing that had been seeking a receiver to take over financial control of his firm.

The petition, filed by Girardi's longtime law partner, Robert M. Keese, the widow of a former firm lawyer and several other individuals, was anticipated after it was revealed at another court hearing last week by a litigation finance company that lent money to Girardi Keese.

Meanwhile, an attorney representing victims of a plane crash who have sued Girardi and his firm for keeping funds from a confidential settlement reached with Boeing Co. filed a motion in Illinois federal court seeking to stop his wife, Erika Jayne, from selling designer clothing acquired during their marriage.

Friday's bankruptcy petitions were identical, with one against Girardi Keese and the other against Girardi personally. In re: Thomas Vincent Girardi, 20-BK21020 (C.D. Cal Bankruptcy Ct, filed Dec. 18, 2020); In re: Girardi Keese, 20-BK12022 (C.D. Cal Bankruptcy Ct, filed Dec. 18, 2020). The cases were assigned to U.S. Bankruptcy Judge Sandra R. Klein.

"We need three creditors with unsecured claims and can amend them to add more," Andrew Goodman, an attorney with Goodman Law Office in Westlake Village, said in a telephone interview after the Friday afternoon filing.

The filings list $6.5 million in claims by Keese, H. John Abassian, Jill O'Callahan -- the widow of former Girardi Keese attorney James G. O'Callahan -- and three other individuals.

Keese, O'Callahan and another former Girardi Keese partner sued Girardi Keese last week to dissolve the partnership and for an accounting of money they say was never paid to cover taxes on the firm's Wilshire Boulevard office.

News of the federal bankruptcy petitions halted further activity in a complaint by California Attorney Lending II after the company's attorney, Keith M. Gregory of Snell & Wilmer LLP, revealed they had been filed.

"We'll just leave it to the bankruptcy judge," said Los Angeles County Superior Court Judge Richard L. Fruin Jr.

Attempts to reach Girardi and his attorneys were unsuccessful.

The bankruptcy petitions by Keese and O'Callahan follow a Monday lawsuit they filed in Los Angeles County Superior Court against Girardi and the firm.

Girardi told his partners the firm's Wilshire Boulevard property, worth at least $7.5 million, was unencumbered, the complaint says. But the plaintiffs said Girardi has taken out loans and liens estimated at $7.46 million with Nano Banc. Keese et al. v. Girardi et al., 2OSTCV47657 (LA County Sup. Ct, filed Dec. 14, 2020).

In a second lawsuit, for breach of contract and conversion, Keese claims he is owed $506,876 because Girardi has stopped making bimonthly payments since Nov. 3 for the continued use of his goodwill and name. Keese v. Girardi, 20OSTCV47715 (LA County Sup. Ct, filed Dec. 14, 2020).

On Friday, Jay Edelson, an attorney with Edelson PC who represents families of victims of a plane crash in Indonesia, wrote he suspected Girardi and his wife were trying to move assets out of the country. He is asking U.S. District Judge Thomas M. Durkin to order Jayne -- also known as Erika Girardi and a star of the TV series, "The Real Housewives of Beverly Hills" -- to stop selling any clothing acquired during her marriage and to direct her to deposit any money she received after entry of the court order freezing Girardi's assets with the court clerk.

Durkin ordered a hearing on the matter to be held on Tuesday.

William F. Savino, a Buffalo, New York-based partner with Woods Oviatt Gilman LLP who represents California Attorney Lending II, expressed no concern about the bankruptcy filing.

The federal bankruptcy petitions stay the lender's state court case, but Savino said in an email that his client "would be ahead of the petitioners who filed these cases" because their claims are unsecured.

Savino said Girardi owes the lender, a secured creditor, $6.25 million in a judgment.

But the lender is among the defendants in Edelson's lawsuit in Illinois federal court on behalf of the plane crash victims who sued Girardi.

Daily Journal Staff Writer Jessica Mach contributed to this report.