Welcome

Girardi Keese Found in Contempt Over Millions Kept from Clients

Dec. 15, 2020, 6:20 PM

The assets of law firm Girardi Keese and partner Tom Girardi were frozen by a federal district court in Illinois, and a $2 million-plus-interest judgment entered against them, after the firm and one of its named partners were found in civil contempt of court over their apparent failure to distribute client settlements.

Judge Thomas M. Durkin’s Monday order, which followed a court hearing the same day, also required current GK partner Keith Griffin and former GK partner David Lira to explain why they shouldn’t also be held in contempt of court. Lira is also Girardi’s son-in-law.

The allegedly undistributed settlements were paid by Boeing to resolve litigation brought by family members of those killed in the 2018 Lion Air crash.

The contempt proceedings were initiated when Edelson PC, which served as local co-counsel in the Boeing matters, filed a motion asking the court to order GK to explain why it shouldn’t be held in contempt for its failure to pay out client settlement funds pursuant to the court’s orders. It also alleged that the firm and Girardi had misappropriated client funds.

Edelson’s motion was filed at about the same time it filed a separate lawsuit against GK, Girardi, his wife Erika Girardi, Griffin, Lira, Lira’s new firm Johnston Hutchinson & Lira LLP, and others to locate and recover the allegedly embezzled client funds and its share of attorneys’ fees.

Shortly after Durkin’s order, the Chicago U.S. Attorney’s Office asked the court to modify a sealing order to allow it and other federal law enforcement personnel access to court filings, citing the contempt motion and Edelson’s complaint.

Durkin has already ordered a redacted version of GK and Girardi’s written response to the contempt allegations, filed Dec. 11, to be unsealed.

GK didn’t respond to Bloomberg Law’s earlier requests for comment on Edelson’s allegations. Lira denied all of the allegations in a written response, saying that he and his firm had no connection to Girardi & Keese, Tom Girardi, or Erika Girardi. He said JHL has never represented clients in the Lion Air Crash, and that neither he nor his firm received any money in connection with those cases. “This is a GK issue; not a JHL or David Lira issue,” he wrote.

Monico & Spevack entered an appearance on behalf of GK in the contempt proceedings.

The case is In re: Lion Air Flight JT 610 Crash, N.D. Ill., No. 1:18-cv-07686, unpublished 12/14/20.

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

To read more articles log in.

Learn more about a Bloomberg Law subscription.