The Erika Jayne/Tom Girardi saga upended ‘Real Housewives.’ Here’s where things stand

Scandal is no stranger to “The Real Housewives,” Bravo’s hit reality franchise about the conspicuous consumption and constant backbiting of affluent women from New York to Salt Lake. But few controversies have revived interest in a flagging series as swiftly as the saga of Tom and Erika “Jayne” Girardi, which last season set “The Real Housewives of Beverly Hills” alight.

From the cast member and erstwhile pop star’s seemingly precipitous November 2020 divorce filing to the onetime legal lion’s alleged theft of millions from orphans, seniors and other clients, talk of the former couple — and suspicions about what Erika Girardi knew about the collapse of her husband’s law firm — consumed the series’ 11th season. At the center of it all were Times reporters Matt Hamilton and Harriet Ryan, whose story about the pair’s rise and fall, “The legal titan and the ‘Real Housewife,’” became one of the narrative’s central plot points.

It’s now been six months since the “Beverly Hills” reunion. In advance of Wednesday’s Season 12 premiere, Hamilton discusses developments that have occurred in the off-season, where the legal case against Tom Girardi stands now and what he’ll be looking for in Erika’s storyline this season.

After you and Harriet published an investigation last March into the cozy relationship between Tom Girardi and the California State Bar, the Legislature ordered an audit of the organization. What were its conclusions?

The audit found that the State Bar — which is meant to protect the public from corrupt and unethical attorneys — fails to effectively discipline lawyers.

The audit also found that some of the problems that were made glaringly apparent in the Girardi case are more pervasive than just one prominent lawyer: Some attorneys are not properly investigated despite numerous complaints, and there’s no effective system to address conflicts of interest between lawyers and the State Bar’s staff of investigators and prosecutors. Even when attorneys are investigated, many just get a confidential warning letter — so the public is not alerted to misconduct.

After belatedly filing charges against Girardi last spring, the State Bar opened its own probe. What is the status of that investigation, and how does its purview differ from the state audit?

The State Bar has conducted at least two internal investigations into the Girardi fiasco, so I’ll break them down.

The first was an audit of how the agency handled decades of complaints against Girardi. That audit is not public — the State Bar refuses to release it — but they summarized their findings by acknowledging “mistakes made in some investigations over the many decades of Mr. Girardi’s career going back some 40 years.”

Then, last September, the leaders of the State Bar ordered a more wide-ranging probe that focuses on how Girardi eluded discipline and whether staff or other public officials at the agency aided and abetted him.

This second, broader investigation is being conducted by an outside law firm, and it is very much ongoing and appears to be intensifying.

Just this week, we saw a key development: The State Bar and the bankruptcy trustee (a court-appointed administrator who oversees the Girardi Keese law firm’s assets and liabilities) asked a federal judge to approve what is basically a cooperation agreement. If approved by a judge, this arrangement will allow the State Bar to get financial records and communications at the now-defunct law firm that could illuminate the relationship between Girardi and the State Bar’s staff and leaders, past and present.

When we last spoke about Tom and Erika at the end of Season 11, bankruptcy proceedings against Tom Girardi and his law firm, Girardi Keese, were in the asset identification stage, and hearings over attorney misconduct were planned in the Indonesian plane crash case. What’s the status of Tom’s legal woes now? Are criminal charges expected in the case?

The legal woes are still here, and resolution is a long way off.

There’ve been more than 670 claims against the now-bankrupt Girardi Keese law firm, and if you add them up, they exceed $495 million. More than 500 of those claims were filed in 2022 — to give you an idea of how the scope of the law firm’s debts is still coming into focus. The claims come from former clients, vendors to the law firm, former firm employees, and fellow attorneys who say they were stiffed out of their share of case settlements.

How and whether those claimants will be paid remains to be seen. The law firm had scores of cases, and those have been farmed out to other attorneys to continue representing clients and trying to achieve settlements or verdicts. Then, a portion of those settlements will come back to the firm and then to creditors — but it’s a long process.

There have been other ways the trustee is identifying and monetizing its assets. For example, there was an auction last year for furniture, memorabilia and other oddities left after the firm collapsed. The wire transfer receipt from Pacific Gas & Electric’s $263 million settlement went for more than $700. A suit went for $70. An old Cadillac sold for more than $6,000.

The bankruptcy trustee has also retained a “special counsel” whose assignment is to recover assets that went to Erika Girardi. Last week, the special counsel’s assignment was officially expanded to also potentially pursue claims against Girardi Keese’s litigation funders — which loaned millions to the firm to keep it afloat — as well as the law firm’s accountants and outside legal counsel.

As to criminal case: I have no insight either way. Yes, a federal judge in Chicago said he’d refer the matter for criminal investigation, but no one has been charged at this time.

Where does Erika fit into all of the legal wrangling at this point? Though she was dismissed from a fraud lawsuit against Tom in January, she was just last month named alongside him in a $50 million racketeering suit, among other outstanding cases. Is this opportunism or is her level of involvement in Tom’s alleged wrongdoing still an open question?

Well, it’s a complicated legal horizon. Her divorce is ongoing. Erika is also one of the claimants on the Girardi Keese bankruptcy, which means that she’s seeking some of the assets left over after legitimate claims are paid.

Yet as I said earlier, Erika has been a target of the firm’s bankruptcy trustee, and they’ve tried to recover assets of the firm. The bankruptcy’s special counsel began by identifying more than $242,000 that Erika was assigned to receive from Girardi Keese client’s settlement with the state lottery. Tens of thousands of dollars were set to continue flowing to her in the coming years. Yet Erika’s lawyer has pushed back on that, saying the payments were mailed to the Girardi Keese law firm — which managed Erika’s finances — and that “Ms. Girardi does not have a recollection of receiving the Lottery Payments.” Her lawyer also said these payments were no secret; they were contained in a settlement filed in court.

Earlier this year, the trustee then began trying to claw back some diamond earrings that they allege Tom Girardi paid for with money from a client trust account. (The $750,000 payment to the downtown L.A. jeweler was described as a “cost” of litigation, according to the trustee’s review of financial records.) Erika’s lawyers have also contested this move, but nevertheless, she agreed to put the earrings in a safe deposit box and not to sell the jewelry. Court filings from last week indicate “the parties also have been engaged in settlement discussions” — and the earrings are going to be appraised, which suggests some resolution of this particular dispute is near. But Erika’s attorney has positioned these actions as “the trustee [seeking] to blame Erika for events of 15 years ago at a law firm in which Erika had no part,” saying the earrings were “innocently received 15 years ago from her now-estranged and then-extraordinarily wealthy husband.”

Yes, Erika was named in an elaborate court filing by the Chicago lawyers, Edelson PC, that alleges a racketeering conspiracy involving Girardi, the firm, Erika, and others. Erika is described in that filing as the “frontwoman” at Girardi Keese, what “was little more than a criminal enterprise, disguised as a law firm.”

But there’s a hitch. That was only a draft lawsuit that was submitted as an attachment as part of a somewhat novel proposal to a federal judge in Chicago: The Edelson law firm and its insurers will pay the Lion Air crash victims the money that the Girardi law firm never passed on to them. In return, the crash victims will sign over their claims to Edelson to pursue those responsible.

The federal judge, U.S. District Judge Thomas Durkin, has approved the arrangement, which clears the way for Edelson to formally file the suit in a California court.

What will you be watching for on “Beverly Hills” this season?

Other than watching for tidbits on the Girardi saga?

A motif of the show is how each Housewife treats her housekeeper or domestic staff, and I find those interactions can be revealing.