Girarid Keese bankruptcy trustee can’t hire another law firm

A judge has rejected the petition of the Girardi Keese bankruptcy trustee to hire a law firm to investigate litigation funders that lent the firm money.

U.S. Bankruptcy Judge Barry Russell of Los Angeles turned down Elissa D. Miller's application to hire Girard Sharp LLP to look into the possible misuse of assets last week after a creditor's attorney objected to the cost of doing so.

Indira J. Cameron-Banks, a principal at Cameron Banks Law who represents the family of a former Girardi Keese client who has aggressively pursued Thomas V. Girardi's assets, argued that Miller was already spending enough money tracking down the firm's assets.

Adding another firm, where partners are paid up to $975 per hour, would further drain the estate, she argued.

Philip E. Strok, a partner with Smiley Wang-Ekvall LLP who represents Miller, a partner with SulmeyerKupetz APC, countered in a court filing that the hiring of Girard Sharp would help creditors.

"The trustee has reason to believe that certain of the debtor's litigation lenders may have had information regarding the debtor's misuse of funds prior to the filing of the involuntary petition," Strok wrote. "Now, the trustee must investigate whether there are potential claims against the lenders that may ultimately benefit the estate."

Girard Sharp is qualified to investigate possible claims against the lenders, he added.

But Cameron-Banks, in an email to the Daily Journal about her objection on behalf of the Ruigomez family, wrote that victims "deserve at least some chance of recovery before more attorneys drain assets from the Girardi Keese bankruptcy estate."

Russell sided with her, and turned down the application to hire Girard Sharp. In re: Girardi Keese, 20-BK-21022 (C.D. Bankruptcy, filed Dec. 18, 2020).