CHICAGO (Legal Newsline) – A Chicago federal judge has held a plaintiffs lawyer whose wife is a reality TV personality misused $2 million awarded to families over one of the Boeing 737 Max crashes.
Judge Thomas Durkin’s order finding Thomas Girardi, whose wife is Real Housewives of Beverly Hills star Erika Jayne, in contempt follows the effort of a Chicago personal injury firm that is suing Girardi over the use of settlement proceeds from another Boeing 737 settlement.
Judge Durkin froze Girardi’s assets and said he is referring the issue to federal prosecutors. His firm, Girardi Keese, is apparently going through tough financial times and has only $15,000, the Los Angeles Times reported.
In Edelson’s lawsuit, the firm recently moved to dismiss allegations against a litigation funder.
That business, Stillwell Madison, has its own history of litigation with the 81-year-old Girardi, whose lawyers said might have some mental competency issues.
Edelson’s lawsuit centers on the handling of an otherwise confidential settlement the Edelson firm assisted Girardi in securing in early 2020 from aircraft maker Boeing on behalf of families of victims of the crash of Lion Air Flight 610, which went down off the coast of Indonesia in 2018, killing 129.
Litigation over that plane crash continues in Chicago courts and elsewhere against aircraft maker Boeing, and others.
In the complaint, Jay Edelson claims Girardi embezzled much of those funds, preventing much of the settlement from being paid to the crash victims’ families and to the Edelson firm for its services in securing the payment from Boeing.
Edelson asserts the alleged embezzlement is the latest in a pattern of behavior from Girardi, which the Chicago law firm compared to the Ponzi scheme executed by convicted New York financier Bernie Madoff.
The lawsuit asserts Girardi’s personal and professional finances are in a “downward spiral,” as evidenced by Girardi’s “mounting loans and debt (which) have piled up to such an extent that GK (Girardi Keese) can no longer meet its financial obligations and it is likely that GK will soon not be a going concern.”
Edelson has asked to sever Stilwell Madison from the case to file a new one that would then be dismissed. The request confused Chicago federal judge Matthew Kennelly, who has ordered Edelson explaining why he would go to those lengths.
“The Court questions the appropriateness of a severance under the applicable rules and wonders why plaintiff wishes to proceed in what seems to be the hard way rather than the much easier and common mechanism—a stipulation between plaintiff and the particular defendant for dismissal of the claims against that defendant, something that is done basically every day of the week in this courthouse and elsewhere,” Kennelly wrote.