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Edelson PC Pitches Way to Repay Lion Air Families’ Missing Money

April 6, 2022, 7:44 PM

Edelson PC has reached a proposed deal to compensate its former clients, family members of people killed when Lion Air flight 610 crashed in 2018, for more than $2 million in Boeing settlement funds misappropriated by Thomas Girardi and his now defunct law firm, Girardi Keese.

If approved, Edelson and its insurer, Hudson Property & Casualty, will reimburse the Lion Air families for the full amount of money they lost as a result of Girardi’s admitted mismanagement of the funds. In exchange, the clients will assign to Edelson any and all related claims they have against Girardi and others who may have assisted him.

Although Edelson would essentially stand in the shoes of its former clients for purposes of pursuing legal claims against Girardi and his alleged co-conspirators, the proposed agreement provides that the Lion Air plaintiffs would receive a share of any surplus money recovered on their assigned claims.

Edelson would, in effect, assume the risk of recovering the money for its former clients.

The proposed agreement, filed in the U.S. District Court for the Northern District of Illinois on Tuesday, requires Judge Thomas M. Durkin’s approval because it involves minor parties.

The agreement doesn’t provide for any release of claims against Edelson, but states that the clients agree that “Edelson and its employees acted at all times reasonably and in accordance with the standards required of attorneys in Illinois and California, including by affirmatively bringing Girardi Keese’s misconduct to the Court’s attention and vigorously prosecuting its contempt motion against Girardi” and other former GK attorneys Keith Griffin and David Lira.

Although Girardi was held in contempt upon admitting that his firm spent his clients’ money more than two years ago, the contempt proceedings against Griffin and Lira are ongoing.

The motion for approval of the proposed deal, conditioned on formal execution of the client agreements, attaches a draft complaint by Edelson against nine “investigative targets” including Girardi; Griffin; Lira; Girardi’s estranged wife Erika Girardi, also known as Erika Jayne; GK’s former chief financial officer Christopher Kamon; Wrongful Death Consultants and its chief, George Hatcher; and California Attorney Lending II Inc., along with its founder Joseph DiNardo.

Though not final, Edelson says the draft complaint—which alleges a vast, yearslong Ponzi-style conspiracy involving prohibited referral arrangements, questionable lending, money laundering, and outright lies—is “a fair representation” of the claims Edelson intends to bring against the targets.

The Lion Air families are represented by Wisner Law Firm.

The case is In re Lion Air Flight JT 610 Crash, N.D. Ill., No. 1:18-cv-07686, 4/5/22.

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; Nicholas Datlowe at ndatlowe@bloomberglaw.com