The bankruptcy trustee for Thomas Girardi’s law firm wants divorce counsel for his estranged wife, Erika Girardi, also known as Erika Jayne, to testify about the whereabouts of potential firm assets, according to a motion filed by special litigation counsel in a federal bankruptcy court in California.
The motion filed in the U.S. Bankruptcy Court for the Central District of California asks the court to require the Real Housewives of Beverly Hills star’s family lawyer, Larry A. Ginsburg of Harris Ginsburg LLP, to submit to the examination on July 23.
It also asks the court to require Ginsberg to hand over documents, including, among other things, financial statements, evidence of money transfers, non-privileged communications between Erika and Ginsburg, and communications between Ginsburg and Thomas Girardi or his counsel, Michael Abrams.
Trustee Elissa D. Miller hired the Law Offices of Ronald Richards & Associates APC to serve as special litigation counsel in order to track down assets believed to have been fraudulently transferred.
Erika’s related companies received over $20 million, according to the motion, and special litigation counsel has “corroborated that settlement funds were diverted” to her.
To the extent that special litigation counsel determines that Erika has spent money that belongs to the firm, the motion says it will pursue a money judgment, part of which would go to paying attorneys’ fees.
Erika created a new company, which the motion says appears to be “simply a successor company,” after news broke that Girardi failed to deliver millions of dollars in settlement funds to former clients.
She has refused to cooperate or provide the trustee access to books and records for her companies and hasn’t made any effort to return structured payments for fees being made to her instead of the firm, despite outreach from counsel, the motion says.
Erika has been receiving the fees from an “improper assignment” for years, it also says.
The motion accuses Erika of “publicly dissipating community assets by selling her clothes on public websites” and “flaunting large jewels on social media and on television,” alleging that she is aiding and abetting in “sham transactions” to divert assets from the firm.
Erika’s accountant and management company will be the “next targets” in the trustee’s effort to uncover the firm’s assets, the motion says.
Dinsmore & Shohl LLP, filed a motionto withdraw as counsel for Erika on June 15, stating that “the relationship of trust and confidence” between Erika and it had “broken down,” and that the relationship was “irreparable.” But the motion to withdraw, filed by Peter Mastan, was itself withdrawn just two days later.
Since then, another lawyer from Dinsmore & Shohl, Matthew Wasserman, filed an application to appear on her behalf.
Neither Mastan nor Wasserman immediately responded to Bloomberg Law’s request for comment Wednesday.
The case is In re Girardi, Bankr. C.D. Cal., No. 2:20-bk-21022, Motion 6/22/21.