Lawyer must wait his turn to sue Erika Jayne Girardi, trustee says - Reuters

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Singer and actress Erika Jayne at the 2017 American Music Awards. REUTERS/Danny Moloshok

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• Edelson PC sued Tom and Erika Girardi in December
• Trustee says letting case proceed would disrupt Girardi Keese bankruptcy

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(Reuters) - A bankruptcy trustee overseeing the estate of Tom Girardi's defunct law firm is asking a judge to delay a lawsuit against Girardi's estranged wife, "Real Housewives of Beverly Hills" star Erika Jayne Girardi.

Chicago law firm Edelson sued the Girardis in federal court in December, alleging they misappropriated settlement funds to fund their "glitz-and-glam" lifestyles. The lawsuit triggered a flood of claims led by Girardi's former partners that forced Girardi Keese into bankruptcy.

Edelson earlier this month asked a Los Angeles bankruptcy judge to allow it to pursue its claims against Erika Girardi despite an automatic pause in the case triggered by the Girardi firm's bankruptcy.

But Chapter 7 trustee Elissa Miller said in a Tuesday filing that the stay is needed for her to investigate whether law firm assets were fraudulently transferred to the reality star.

"Edelson's motion will disrupt the GK trustee's administration of the GK estate," Miller wrote.

U.S. Bankruptcy Judge Barry Russell has scheduled a Nov. 2 hearing on the matter.

Miller declined to comment. Jay Edelson, the founder and CEO of Edelson, said his firm is working on a reply to Miller's filing.

"One thing that the trustee misunderstood was our firm's financial interest in this scandal," Edelson said in an email. "We are not, as the trustee suggested, trying to 'cut in line.' Rather, our view is that the clients need to be paid first."

Erika Girardi, represented in the bankruptcy by Evan Borges from Greenberg Gross, opposed Edelson PC's motion in a Wednesday filing. Borges did not respond to a request for comment.

Attorneys for Tom Girardi and Girardi Keese have acknowledged in federal court that the settlement funds at issue in the Edelson lawsuit were not distributed. Erika Girardi has not responded in that case, nor have attorneys entered appearances for her.

Jason Rund, the Chapter 7 trustee overseeing Tom Girardi's personal estate, said in his own Tuesday filing that he had no objection to the Edelson firm pursuing claims against Erika Girardi as long as Russell retains "exclusive jurisdiction" to determine whether Erika Girardi's assets actually belong to her estranged husband.

The case is In re Thomas Vincent Girardi, U.S. Bankruptcy Court for the Central District of California, 2:20-bk-21020.

For Elissa Miller: Philip Strok, Kyra Andrassy and Timothy Evanston, of Smiley Wang-Ekvall

For Jason Rund: Timothy Yoo and Carmela Pagay of Levene Neale Bender Yoo & Brill

For Edelson: Rafey Balabanian of Edelson

For Erika Jayne Girardi: Evan Borges of Greenberg Gross

Read More:

Erika Jayne Girardi swaps counsel as Dinsmore exits case again

Judge OKs counsel to probe alleged transfers to Tom Girardi's wife

Girardi, firm forced into Chapter 7 liquidation as judge weighs appointing guardian

Tom Girardi and reality star wife sued for alleged theft of Lion Air settlement funds

David Thomas

David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at d.thomas@thomsonreuters.com and on Twitter @DaveThomas5150.

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