U.S. Markets close in 4 hrs 54 mins

Thomas Girardi's $15M Scrum With Litigation Funder Sent to Arbitration, but Asset Fight Still Could Be Public

Tom Girardi and his wife Erika Jayne during the episode “Horsing Around" of the Bravo television show The Real Housewives of Beverly Hills.

Tom Girardi and his wife Erika Jayne during the episode “Horsing Around" of the Bravo television show The Real Housewives of Beverly Hills, which aired Dec. 15, 2015.

The fight between prominent plaintiffs attorney Thomas Girardi and a litigation funder that claims he and his firm haven't paid back a $15 million loan has been routed to arbitration. However, a significant, potentially public fight remains over whether Mill Valley-based funder Law Finance Group LLC will be able to go after Girardi's personal assets if it wins in arbitration.

Law Finance Group sued Girardi, better known to reality TV fans as the husband of "Real Housewives of Beverly Hills" star Erika Jayne, and his firm, Girardi Keese, in Los Angeles Superior Court in January. The funder claims that Girardi and the firm refused to hand over recovered fees from cases the parties allegedly agreed would repay the loans.

Girardi asked last month for the dispute to be routed to arbitration, a move that Law Finance Group did not oppose. Los Angeles Superior Judge Gregory Alarcon granted Girardi's motion to compel arbitration in the case in early April. However, a hearing remains pending on Alarcon's calendar for April 24 on Law Finance Group's writ of attachment, which seeks to secure some of Girardi's assets to pay out damages should the funder succeed on its underlying claims now in arbitration.

Among the assets listed in Law Finance Group's filing are a home in Pasadena, the Girardi Keese offices on Willshire Boulevard in Los Angeles, the firm's bank account and receivables, and nine other bank accounts.

Girardi didn't respond to requests for comment.

Leslie Corwin of Eisner, Law Finance Group's lawyer, said in correspondence to Girardi attached to court filing that the lawsuit was filed in state court explicitly so his client could secure assets. "This matter was originally filed in Los Angeles Superior Court because arbitrators are not authorized to grant certain statutory provisional remedies, including writ of attachments," Corwin wrote. "For that reason, despite our agreement to proceed with arbitration, please be advised that the hearing on the Writ of Attachment shall not be stayed."

In a phone interview this week, Corwin said that although the dispute with Girardi will play out in arbitration, his client is moving forward with its effort to attach Girardi's assets to the case. "The writ of attachment hearing, the judge agreed, is going forward and is going forward on April 24," Corwin said. "Right now it’s on, and we have every intention of it going forward as scheduled on the 24th." 

Girardi notably scored $333 million settlement on behalf of residents of Hinkley in the toxic tort case that inspired the film “Erin Brockovich.” Girardi’s finances and those of the firm, however, have repeatedly been the subject of litigation since his wife joined the cast of the Bravo reality television show in 2015.

Read Law Finance Group's Writ: