Girardi Keese trustee tweaks reason for changing counsel

Beverly Hills attorney Ronald N. Richards' departure as special litigation counsel in the Girardi Keese bankruptcy has concluded with him asking for and receiving a tweak in the rationale given by the trustee over the weekend.

Elissa D. Miller, a partner with SulmeyerKupetz who is the trustee of the firm bankruptcy, agreed to change the reason for replacing Richards with Larry W. Gabriel, a partner with Jenkins, Mulligan and Gabriel LLP.

"At this time, the trustee believes that it is necessary for her to retain Gabriel in place of Richards due to a breakdown in communications and differences in how the case should be handled," Miller wrote last Wednesday.

But Richards objected to a portion of that sentence, and he filed a clarifying response removing the language about a "breakdown in communications" which was agreed to by Philip E. Strok, a partner with Smiley Wang-Ekvall LLP who represents Miller. In re: Girardi Keese, 20-BK-21022 (C.D. Bankruptcy Ct, filed Dec. 18, 2020).

"As stated previously, the trustee and I jointly decided it was in the best interests of the estate to change counsel," Richards wrote in an email. "The current application with the removed language references a change in litigation strategy as the reason for the voluntary substitution."

Miller replaced Richards a few days before a Chicago law firm, Edelson PC, got permission from a Los Angeles bankruptcy judge to pursue assets of plaintiffs' attorney Thomas V. Girardi's wife in Chicago federal court.

U.S. Bankruptcy Judge Barry Russell granted the firm's motion last week for relief from a stay blocking its claims against Erika Girardi, a celebrity best known for her role in the Bravo TV series, "The Real Housewives in Beverly Hills."

Evan C. Borges, a partner with Greenberg Gross LLP, opposed the request by Edelson to remove the stay. In re: Thomas V. Girardi, 20-BK-21020 (C.D. Bankruptcy Ct., filed Dec. 18, 2020).

Borges argued the claims against his client should remain on hold because the federal lawsuit in Chicago is based on an "unethical, unenforceable and illegal fee-sharing agreement between Edelson and Girardi Keese" over a lawsuit concerning a plane crash in Indonesia, according to a court filing.

Edelson is seeking money from the settlement of that lawsuit by Boeing Co., which he said was transferred by Girardi Keese to Erika Girardi and companies controlled by her.

Richards, while acting as special litigation counsel, agreed with Borges, prompting a series of allegations by the Edelson firm.

Jay Edelson, founder and CEO of the firm, repeated his assertion that Richards was terminated, citing a statement to him by Strok.

"We found the goods on Erika and we're going to go after her," he said in an interview Monday in which he repeated the firm's criticisms of Richards. "We think that Ronald has acted improperly."

Richards countered in a Monday statement that Edelson doesn't have a legitimate claim.

"All of this Jay Edelson bluster will not create fee sharing agreements signed by former Girardi/Edelson clients, the absence of which makes any fee claim by Edelson PC voidable," he wrote in an email.

Miller and Strok could not be reached for comment Monday. Borges also could not be reached.

Russell said during last week's hearing that Borges will have to fight Edelson's claims against Erika Girardi in the Chicago lawsuit. Edelson PC v. Girardi et al., 20-CV-07115 (N.D. Ill., filed Dec. 2, 2020).