Ex-Girardi Keese lawyers blame boss for missing payments

Two former Girardi Keese attorneys faced a host of skeptical questions from a Chicago federal judge Wednesday during a hearing to consider whether to hold them in contempt.

The two Los Angeles area attorneys, Keith D. Griffin and David R. Lira, worked for decades for Thomas V. Girardi, the now suspended plaintiffs’ attorney who won major verdicts over the years but has gone into bankruptcy after failing to pay clients.

Wednesday’s hearing stemmed from the failure to pay the families of victims who were killed in a Boeing Co. plane crash in Indonesia. In re: Lion Air Flight JT 610 Crash, 18-CV-07686 (N.D. Ill., filed Nov. 19, 2018).

Despite his decades of experience and $450,000 annual salary, Griffin portrayed himself as a well-meaning attorney who feared Girardi but kept urging his boss to pay the clients until he finally quit in November 2020.

“In hindsight, I wish I had made different decisions,” Griffin told U.S. District Judge Thomas M. Durkin. “I thought it was Mr. Girardi’s decision to handle.”

Griffin said he faced Girardi’s wrath when he kept telling the powerhouse lawyer to pay the clients.

He testified that Girardi snapped at him whenever he brought up the subject, saying he was acting “above his pay grade,” and the firm wasn’t “Girardi and Keith.”

But Durkin repeatedly asked Griffin, who spent much of Wednesday on the witness stand, why he did nothing about Girardi’s failure to pay plaintiffs between April 2020 — when the Boeing settlement money was received — and his resignation eight months later.

The firm paid the clients half the settlement money owed in the spring of 2020, and Girardi kept promising to pay the rest until both attorneys quit.

“It was very bad in April,” the judge said. “If you couldn’t convince Girardi, wasn’t it time to get some help? Didn’t you realize at that point you needed to consult with somebody about your exposure?”

Griffin said he was less concerned about any personal liability than getting the clients paid, even if some money came from attorney fees collected in an unrelated case.

“I wasn’t as concerned where the money was coming from,” he said.

Ryan D. Saba, a partner with Rosen Saba LLP who represents Griffin, and Edith R. Matthai, a partner with Robie & Matthai who represents Lira, portrayed Girardi as the sole partner at Girardi Keese who had total control of the firm’s finances.

Saba said all of the attorneys who handled the Lion Air case — including local counsel Edelson PC, which is pursuing the contempt claims and also suing Griffin and Lira in a separate lawsuit — believed Girardi would pay.

“All of them, in their hearts, thought Mr. Girardi was going to pay the clients,” Saba said during his opening statement.

Matthai said Lira quit in June after a “shouting match” with Girardi over his failure to pay the Lion Air clients. She defended Lira, saying he never thought his father-in-law would do so much damage to himself.

“Mr. Lira believed Mr. Girardi was not going to commit professional suicide,” Matthai said. “The only thing that Mr. Girardi cares about was his standing in the legal community, and he was not going to destroy that.”

Jay Edelson of Edelson PC said Girardi “was running a Ponzi scheme for many, many years.”

While Girardi refused to pay settlement money to victims, Lira and Griffin continued to collect their salaries. He said they were “complicit” in Girardi’s schemes and weren’t just people who worked in the mail room.

Girardi has indicated he would take the Fifth Amendment if called to testify. And there are questions about his mental capacity, with his brother filing papers that he can no longer care for himself.

He faces disbarment and both he and his firm are in bankruptcy.

“I’m angry that Mr. Girardi is not here to answer for what he did,” Griffin said.

Griffin testified that he repeatedly contacted Rafey S. Balabanian, an Edelson partner, during the summer and fall of 2020 about the missing settlement funds as well as money Girardi Keese owed the Chicago firm as local counsel.

When Girardi missed a deadline at the end of November to pay the clients the remaining funds, Griffin quit and recommended Robert W. Finnerty, a former Girardi Keese attorney who now works at Abir Cohen Treyzon Salo LLP, to file a claim against the firm.

While Saba and Matthai spoke of Girardi’s clout in the California legal community and connections with politicians and leading celebrities, as well as the State Bar, Durkin said that didn’t matter.

“I don’t care who Tom Girardi was,” the judge said after Griffin spoke about how frightened he was of him. “This witness was an adult.”

Lira started his testimony Wednesday afternoon. He will continue testifying Thursday morning, followed by Edelson attorneys.