Real Housewives of Beverly Hills cast member Erika Girardi, more commonly known as Erika Jayne, is the latest example of just how powerful (and expensive) an involuntary bankruptcy proceeding can be, The National Review reported. In December 2020, six petitioning creditors commenced involuntary chapter 7 proceedings under § 303 against Tom Girardi, the attorney who had represented Erin Brockovich against Pacific Gas and Electric Company in the 90s, and his law firm, Girardi & Keese. These involuntary petitions came amid allegations that Mr. Girardi had embezzled millions of dollars from his clients and business partners. Shortly after the involuntary petitions were filed, the U.S. Bankruptcy Court for the Central District of California entered orders for relief and appointed chapter 7 trustees in both cases. To date, neither Mr. Girardi nor his firm have made an appearance in the proceedings. Although Ms. Girardi filed for divorce just a month before the bankruptcies, that wasn’t enough to distance herself from embezzlement allegations or protect her from the reach of the chapter 7 trustee. In June, the trustee, through special litigation counsel, filed motions under Federal Rule of Bankruptcy Procedure 2004 seeking the production of documents and records from Ms. Girardi’s landlord, family law attorneys, and accountant. Recently, the trustee filed an adversary proceeding against Ms. Girardi and her business entities to avoid and recover $25 million in transfers. The trustee contends that Ms. Girardi conspired with her husband and his law firm to hide assets meant for victims of Mr. Girardi’s ongoing cases, concluding that Ms. Girardi “has used her glamor and notoriety to continue to aid and abet in sham transactions that have occurred with respect to large transfers of assets” from Girardi & Keese.
