Girardi Keese bankruptcy claimants could benefit from Porter Ranch deal

Claimants in the Girardi Keese law firm bankruptcy could benefit substantially from the proposed $1.8 billion Porter Ranch settlement announced Monday.

Girardi Keese and Frantz Law Group represented 8,202 clients in the litigation, which had more than 35,000 plaintiffs from the biggest natural gas leak in U.S. history. Girardi Keese and Frantz represented the most clients of all the firms involved in the litigation.

According to bankruptcy documents, the Frantz Law Group would receive 55% of the attorney fees from its Porter Ranch cases while Girardi Keese would get the remaining 45%.

Girardi Keese was forced into bankruptcy last year following allegations that Thomas V. Girardi stole millions of dollars from clients. Creditors also accused Girardi of failing to repay millions of dollars in loans.

According to a court filing by Girardi Keese's trustee, Elissa D. Miller of SulmeyerKupetz, the firm could owe more than $101 million to former clients and law firms. Credit companies have also filed claims. In re: Girardi Keese, 20-BK12022 (C.D. Cal Bankruptcy Ct, filed Dec. 18, 2020).

But with a $1.8 billion settlement and Girardi Keese and Frantz Law Group representing approximately 23% of the Porter Ranch clients, a large chunk of the money could go to help the firm's estate pay claimants.

"I was pleased to hear about the settlement and look forward to the future receipt of funds for the benefit of the Porter Ranch clients and the estate," Miller said in an email on Monday.

James P. Frantz of the Frantz Law Group could not disclose how much money would go to the clients, but said his firm had spent thousands of hours and millions of dollars on the case.

When Girardi Keese went into bankruptcy, a battle ensued over who gets to represent its clients in the Porter Ranch litigation. Miller filed a complaint against Abir Cohen Treyzon Salo LLP, saying that firm improperly solicited former Girardi Keese clients. The firm disputed the charges.

Frantz said that the dispute was the only part of the Girardi Keese bankruptcy that caused a disturbance in the Porter Ranch litigation.

"Outside of that, it was pretty much smooth sailing," Frantz said. "Since Girardi wasn't really doing much on the case at all, so it really didn't change much from Day One."

U.S. Bankruptcy Judge Barry Russell has already approved other fee-sharing arrangements expected to bring significant money to the estate. Girardi was involved in cases stemming from the 2017 Las Vegas mass shooting, which settled for a reported $800 million. He also represented plaintiffs in allegations that Johnson & Johnson's talc products cause cancer and people who said they were sickened from toxic emissions in the city of Paramount.

But the Porter Ranch gas leak litigation could be the largest payday.