Class Action

Suit Against Girardi Keese Over Missing Lion Air Money Paused

Feb. 23, 2021, 8:23 PM

Claims against Thomas Girardi and his law firm, Girardi Keese, over unpaid attorneys’ fees and missing settlement funds meant for Lion Air crash plaintiffs have been paused by the U.S. District Court for the Northern District of Illinois.

The lawsuit, brought by former co-counsel Edelson PC remains active, however, with respect to former GK attorneys David Lira and Keith Griffin, after Judge Matthew F. Kennelly directed the parties to “immediately” begin working together to negotiate jurisdictional and venue discovery.

Briefing on motions to dismiss is set to be completed by April 5, according to the court’s docket entry, Monday.

Griffin challenged personal jurisdiction, and Lira challenged venue, in their mid-April motions to dismiss the lawsuit. Both challenged Edelson’s ability to bring claims related to missing Lion Air settlement funds, arguing that Edelson no longer represents the Lion Air plaintiffs, who have in any event already obtained judgments on their claims against Girardi Keese.

Neither are a party to the underlying fee arrangement between Girardi Keese and Edelson PC, and both claim to be merely former salaried employees who lacked authority over the firm’s accounts.

According to Griffin, the Lion Air settlement money “was delivered to Girardi Keese in California,” where he says Girardi Keese’s failure to pay co-counsel fees occurred. Griffin says Edelson has no basis for naming a “non-owner, non-partner, employee in a fee dispute against his former employer.” Griffin says he has never lived in Illinois, and argues that he hasn’t conducted or directed any business in the state in his “individual capacity.”

Lira argues that because “the claims against Girardi and Girardi Keese will be litigated in the Bankruptcy Court for the Central District of California” and “co-defendant Griffin is likely to be dismissed based on lack of personal jurisdiction,” the appropriate venue is the Central District of California, where Lira lives.

Lira had also argued that Girardi Keese’s bankruptcy should stay Edelson’s lawsuit in its entirety, in part because litigating the claims in two different forums could result in inconsistent judgments.

According to Lira, because he’s entitled to indemnification from his former employer Girardi Keese, any judgment against him is functionally a judgment against the firm’s estate. And even if he is derivatively liable for claims against Girardi Keese, GK’s liability would have to be established first, Lira said.

Griffin is represented by Rosen Saba LLP and Cassiday Schade LLP. Lira is represented by Swanson, Martin & Bell LLP and Robie & Matthai APC.

The case is Edelson PC v. Girardi, N.D. Ill., No. 1:20-cv-07115, Docket Entry 2/22/21.

To contact the reporter on this story: Holly Barker in Washington at hbarker@bloombergindustry.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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