Judge Rules, Tom Girardi Victim’s Can Collect From Erika Girardi

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Tom Girardi’s estate owes his ex-clients Joseph Ruigomez, Jaime Ruigomez and Kathleen Ruigomez $11 million

Thieves, Erika & Thomas Girardi

A California bankruptcy judge gave the green light to former clients of celebrity lawyer Thomas Girardi to proceed with a collection lawsuit against his estranged wife, Real Housewives Of Beverly Hills star Erika Girardi.

In a short order, U.S. Bankruptcy Judge Barry Russell lifted a stay so the ex-clients and the bankruptcy trustee liquidating Tom Girardi’s personal property can continue recouping the $11 million judgment against the embattled attorney that they received in 2020 litigation. Trustee Jason Rund of Sheridan & Rund PC and secured creditors Joseph Ruigomez, Jaime Ruigomez and Kathleen Ruigomez entered into a stipulation last month under which they told the judge that lifting the stay is “in the best interest of the estate.”

The judge said the stay would be lifted “for the limited purpose” of identifying recoverable assets and gathering information that will lead to other recoverable assets.”All assets identified by the Ruigomez family shall be subject to all rights of the Girardi bankruptcy estate and the [law firm Girardi Keese] bankruptcy estate, which parties shall meet and confer in good faith to determine the character/ownership of the identified assets,” Judge Russell said.

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Kathy Ruigomez tapped Girardi to represent her family after a natural gas pipeline explosion incinerated her home and left her 19-year-old son, Joe Ruigomez, burned and comatose. After the family reached an eight-figure settlement with utility Pacific Gas and Electric Co., Girardi kept watch over the settlement funds. But unbeknownst to the family, he was dipping into the funds himself. Girardi eventually agreed to pay the Ruigomez family $12 million in mediation with JAMS arbitrator Howard Miller, a former Girardi Keese partner.

He paid $1 million that month but missed a deadline to pay the rest, prompting a state court judge to enter an $11 million public judgment against Girardi last year. Months later, the Ruigomez family learned that the money was gone. Girardi and his firm owe tens of millions of dollars to lenders, businesses and former clients they allegedly fleeced. After an Illinois federal judge found that he took millions of dollars from his clients’ settlements in December, the judge froze his assets and creditors forced him into bankruptcy.

Bankruptcy court filings show Erika Girardi, who filed for divorce last year, may be a co-debtor for millions of dollars of her husband’s personal debt, including some owed to former clients. One lender alleged in court documents that her entertainment company received a $20 million loan from Girardi Keese as the couple’s financial situation grew dire, which, if true, could put her on the hook for even more.

Late last month, Erika Girardi, also known as Erika Jayne, urged Judge Russell to rethink a June 8 decision that allowed the trustee to hire attorney Ronald Richards to dig into her finances, arguing that the attorney has been conducting an online “jihad of extra-judicial statements” targeting her since being appointed earlier in June. Erika Girardi’s lawyer, Peter Mastan of Dinsmore & Shohl LLP, asked to leave the case that same month, citing a “fundamental and material breakdown in the relationship” between her and the firm. Mastan voluntarily withdrew that motion just days later, according to the case docket. Counsel for the creditors and Erika Girardi didn’t immediately return requests for comment late Tuesday. Erika Girardi is represented by Peter Mastan of Dinsmore & Shohl LLP. The Ruigomez creditors are represented by Craig G. Margulies, Jeremy W. Faith and Ori S. Blumenfeld of Margulies Faith LLP.

Law 360

Source: Law 360

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