The Real Housewives of Beverly Hills star Erika Jayne is asking a federal judge to stop him from having to give up a pair of high-end diamond earrings that a bankruptcy trustee says should be sold to help pay off the nearly $500 million debt dollars from her disgraced husband’s law firm.
The earrings are already out of Jayne’s possession: a US bankruptcy court judge ordered her to return them last July, and the trustee stored them in a bank vault for months.
Jayne’s attorney is appealing the rotation order in United States District Court, and he filed a brief late Thursday that the trustee cannot legally claim the earrings because Tom Girardi gave them to her Jayne in 2007 and any pending claims “are barred by every statute of limitations imaginable” as well as California law.
Jayne, who filed for divorce in November 2020, was given the seven-carat earrings in 2007 by Girardi after a burglar stole a pair of similar diamond earrings he had given her as a gift birthday or anniversary a few years earlier. But the bankruptcy trustee of the company Girardi had controlled for years, Girardi Keese LLP, found documents showing the now-disbarred mega-lawyer had paid $750,000 in outright cash for the earrings, and she wants them sold, with all the money going to the company’s estate.
Jayne’s Appeal from the US Bankruptcy Judge by Barry Russell The July 11 rotation order comes as the trustee, Elissa Miller, prepares to auction off the jewelry. On Tuesday, Russell granted his request to hire an auctioneer to facilitate the sale. The auction is to include other jewelry given to the trustee by an unidentified Girardi associate last month, described in court documents as a small Tiffany heart-shaped diamond necklace, a small Cartier diamond necklace, a Bulgari pearls and diamonds and diamond earrings about 1.75 carats each, worth between $10,000 and $15,000.
The company hired to manage it, John Moran & Associates, has previously held auctions for Girardi’s estate, most recently on September 21, with 253 items from Girardi’s “very televised Pasadena mansion,” according to the website. auction including wine, art, books and furniture.
A pair of Gucci men’s leather shoes sold for $1,062.50 while a nearly seven-foot-tall sculpture by the late J.Stewart Johnson Jr., sold for $13,750. Two handwritten letters to Santa Claus sold for $260 and a 1996 Pokemon holographic card featuring the Charizard character sold for $2,812.50. An autographed WWE flag from Wrestlemania 2000 sold for $312.50 and a basketball from the 1993 NBA Finals signed by Michael Jordan went for $4,687.50.
Miller hasn’t been shy about trying to use Jayne and Girardi’s fame to try to collect more money for the company’s long list of creditors: she said in her August 30th auction petition of earrings that the auctioneer “will capitalize on the TVG [Tom Vincent Girardi] and The Real Housewives of Beverly Hills connection in its promotion” in a publicity blitz that includes private in-person previews at top jewelry dealers and collectors in Los Angeles and New York and a banner ad on Diamonds.net.
An estate auction in July 2021 brought about $300,000 in items seized from Girardi Keese’s downtown Los Angeles headquarters, including a 2011 Cadillac scooter for $6,400. A signed poster for the film Erin Brockovitch also went for $1,550; the film was based in part on Girardi’s work in a class action lawsuit against California utility giant Pacific Gas & Electric.
His company’s list of creditors now includes Edward L. Masryhis co-counsel in the case.
Jayne’s lawyer, Evan Borges, pointed out that she had no idea what was going on with her husband’s law firm and that Girardi controlled all of their finances. Its direct knowledge, however, is not necessary for the trustee to seek compensation through it: trustees in bankruptcy frequently initiate so-called adversarial proceedings against recipients of fraudulently spent money who are guilty only of accepting payments or property without knowing the true source.
Along with Jayne’s earrings, Miller found financial documents showing that Girardi had purchased them in 2007 with $750,000 from a highly restricted client trust account set up for a mass tort litigation he was leading regarding the anti-diabetic drug Rezulin. The job had brought him a huge payout: Miller found documents showing his company had received $22.5 million in attorneys’ fees and costs.
The money in the client’s trust account was intended for clients who had been victimized by the Rezulin drug, and the fact that some of that money paid for the earrings means that Jayne “has no legal right or fair” about the earrings, Miller wrote in her original request in January. Russell agreed but found there was no evidence that Jayne knew the true source of the gift, which his attorney pointed out in his new appeal brief, arguing this shows Miller failed to prove that the earrings are indisputably the property of the company’s estate as required by law.
“Ms. Girardi owned and wore the earrings for more than 15 years prior to the trustee action, and never had reason to doubt their ownership,” wrote Borges, partner at Greenberg Gross LLP. His main argument, however, focuses on the statute of limitations for claiming fraudulent transfers, which he says “extinguishes any cause of action for fraudulent transfers based on transactions made more than seven years before an action arose.” brought”.
However, Miller’s attorney, larry gabrielargues that the issues on appeal relate to whether Girardi committed embezzlement by using stolen money to purchase the earrings, and whether Jayne “committed the act of conversion” when she initially refused to hand over the earrings after being told they had been purchased with money intended for her husband’s customers.
Gabriel may file a formal response to Borges’ brief before the designated judge, U.S. District Judge Dale S.Fischer in Los Angeles, makes a decision.
Meanwhile, Miller last week sought approval to sell Girardi’s Pasadena mansion to a couple for $7.5 million.
Read Borges’ full memoir below:
(Images: Jayne photo by Dimitrios Kambouris/Getty Images, Girardi photo by Joe Scarnici/Getty Images for Annenberg Space for Photography)
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