Special counsel OK’d in Girardi bankruptcy despite objection

Beverly Hills attorney Ronald N. Richards can join the Girardi Keese bankruptcy case as special counsel -- despite objections raised over his social media commentary and alleged conflict of interest, a judge ruled Tuesday.

Commenting on the order, Richards said, "Lawyers should feel free to express themselves and engage in petitioning activity."

Richards has gained thousands of followers on Twitter for his comments on allegations that Thomas V. Girardi stole millions of dollars from clients. He is also a regular commenter on the possible involvement of Girardi's wife and "Real Housewives of Beverly Hills" celebrity Erika Girardi, also known as Erika Jayne.

Elissa D. Miller, an attorney with SulmeyerKupetz, and the trustee for the defunct law firm Girardi Keese, wanted to hire Richards to find any assets transferred from the law firm to Erika Girardi.

But Peter J. Mastan of Dinsmore & Shohl LLP, who represents Erika Girardi, objected because of Richards' involvement in another similar case and because of his social media commentary.

In a motion, Mastan argued that U.S. Bankruptcy Judge Barry Russell should issue a gag order on Richards if Russell should approve him as special counsel. In re: Girardi Keese, 20-BK21022 (C.D. Cal. Bankruptcy Ct, filed Dec. 18, 2020).

Russell said during Tuesday's hearing that it is clear that Richards has gotten under Erika Girardi's skin because of his commentary but that he cannot limit Richards' commentary on social media.

"I can't issue any gag order," Russell said. "I don't have the power to do that at all. And if you have any serious complaint, there are other people and entities you can go to complain about the conduct. But I myself, I can't and would not stop him from exercising his First Amendment right."

Mastan also objected to Richards' appointment because Richards represents two law firms which have filed claims against the Girardis; the Law Offices of Philip R. Sheldon APC and the Law Offices of Robert P. Finn. On Tuesday, Mastan argued that the two law firms and the Girardi Keese estate claim the same money.

"There's a limited pie out here," Mastan said during the hearing. "Let's assume they're both correct. Let's assume they're both entitled to judgment. If Mr. Richards gets to judgment first and collects on behalf of Finn and Sheldon law firms, that takes away completely any possible recovery from Ms. Girardi for the estate, leaving the estate's creditors in the cold."

But in motions, Miller, via her attorney Lei Lei Wang Ekvall of Smiley Wang-Ekvall LLP, has claimed that Richards and the creditors he represents have agreed that only the estate will pursue fraudulent transfer claims.

Russell appeared satisfied with that argument and approved Richards as special counsel.

Mastan could not be reached for comment after the hearing.

"She objected because I think she believes that my firm has a lot of resources," Richards said about Erika Girardi's objections, "that we're going to expand toward pursuing this money back to the estate, which will then help the people that didn't get their settlement money and other victim lawyers that didn't get their referral fees."