Sunday, August 7, 2022

Housewife struggles to get $1.4 million worth of jewelry back [DOCUMENTS]

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Embattled ‘Real Housewives of Beverly Hills’ star Erika Jayne is fighting a judge’s order to hand over $1.4 million in diamond earrings, court documents obtained by Heavy Show. The Bravo TV reality star’s lawyers appealed a bankruptcy court ruling in federal court on Tuesday, July 26, according to documents available here.

The earrings were gifted to Jayne by her estranged husband Tom Girardi in 2007. US bankruptcy judge David Russell ordered Jayne to turn over the jewelry to a trustee as part of a lawsuit against Girardi’s closed law firm, Girardi Keese. Lawyers for those who say they are owed money after the collapse of Girardi’s legal empire, including former clients and other attorneys he worked with, have been searching for personal property belonging to Jayne and her companies EJ Global and Pretty Mess Inc., according to court documents .

A source close to the ‘RHOBH’ star previously told People magazine on July 6, ‘It wasn’t easy for[Erika]to let go of something that was sentimental to her. but she knows she had to do it and she complied.” The source told People that Jayne handed over the earrings “months ago,” adding, “Now that the verdict is out, she’s something relieved that a decision has been made and she can officially focus on moving on.”

The judge’s ruling states that the trustee has taken possession of the diamond earrings and is keeping them in a safe. The earrings are valued and the trustee can then sell them, with the proceeds going to a trust during the bankruptcy proceedings. Jayne is now appealing that decision, the July 26 court filing shows. Jayne’s attorney, Evan Borges, is seeking to have the appeal heard by a federal district court judge in California’s central district rather than the bankruptcy court, according to the documents. The appeal has not yet been filed and no hearings are currently scheduled in the case.

According to court documents, on March 7, 2007, Tom Girardi paid $750,000 by check from a trust account for clients of his law firm to purchase M&M Jewelers’ earrings Purpose of Verifying GK Rezulin Trust Account (‘RTA’) Ledgers as ‘Expense’- Item of the ‘Rezulin’ mass claim where the payee is referred to as ‘M&M’ without further explanation. The diamond earrings were then turned over to the defendant Erika.” The funds came from a settlement in a case brought by Girardi Keese vs. Pfizer by people harmed by a diabetes drug, Rezulin, court documents show.

The receiver argued in court: “Given that the funds used to purchase the diamond earrings came from the RTA, Erika has no legal or equitable claim to the diamond earrings and they are legally and equitably valuable assets of the GK bankruptcy estate that owns the.” The trustee can and should sell under Section 363 of the Bankruptcy Act. Based on the foregoing, the trustee has requested the return of Erika’s diamond earrings. At the time of filing this application, Erika has declined to comply with the trustee’s request.”

That application, which can be read here, was made in January 2022, and Jayne eventually surrendered the earrings through May 2022, which are now valued at at least $1.4 million. But she appears to be continuing to fight to get her back, according to recent court filings. Trustee Elissa Miller wrote in a court filing:

Evan Borges, Jayne’s attorney, responded in May in a court filing, which can be read here. He wrote:

Borges added: “Accordingly, the Trustee’s application should and must be denied on legal grounds for two fundamental reasons,” he wrote:

Borges added in the court filing: “Erika is not a lawyer and never has been. Her career during her marriage to TG was as follows
an entertainer. Erika has never worked at GK; she never managed GK’s finances; and she never had access to or knew anything about how TG or GK managed any of their client escrow accounts. Erika also had no involvement in or knowledge of the actions of TG or GK related to the Rezulin litigation or GK’s escrow account in the Rezulin litigation. At all times during the marriage, Erika believed that TG and GK were financially successful, extremely wealthy, and making lots of money.”

About the earrings, Borge stated in the court documents:

Borges wrote: “In late 2021 or early 2022, Erika first heard the trustee claim that the replacement earrings given to her by TG as a gift in 2007 were purchased with money from a GK customer escrow account, which allegedly did not belong to GK or TG. Erika was willing to put the earrings in escrow at any time pending a final court decision as to who is entitled to the earrings. Due to an agreement with the trustee, the earrings are currently being held in a locker that the trustee has access to. Erika has agreed that the earrings can be kept in the locker pending the final court determination of ownership of the earrings.”

Following the judge’s decision regarding the earrings, attorney Ronald Richards, who was involved in the bankruptcy case and representing those seeking money from Girardi Keese, told Radar Online, “The decision to award the earrings to the estate was justified. Erika’s fantastic belief that she could keep the proceeds from a customer escrow embezzlement was disturbing and should never have been discussed. She has no sympathy and one day her attorney and they know that just because you claim willful blindness doesn’t give you the right to keep stolen property. She is liable for all monies paid on her behalf and any gifts provided with the stolen client funds.”

As the lawsuits she is dealing with continue to mount, Jayne has maintained her innocence, saying she was not aware of any embezzlement or fraud by her estranged husband and his law firm. But she has now been named in two court cases alleging she profited from the scam and helped build her husband’s image to get the money.

Her attorney, Evan Borges, told Bloomberg Law after his client was named in a $55 million federal RICO lawsuit that this was “another misguided attempt to hold Erika accountable for actions by Tom Girardi and others of which she was unaware and had no involvement.” The lawsuit names Jayne the “front woman” for the massive fraud scheme to steal money from Girardi Keese customers to fund her and her husband’s lavish lifestyles .

Borges added in a statement: “Erika does not have a law degree and has never worked in or managed her former husband’s law firm. Whatever Mr. Girardi or others in his law firm did or said to the plaintiffs in this case, Erika had no knowledge or role in any of it. The focus should be on Mr Girardi, his law firm and everyone else who made what he did possible. The accumulation of heather may generate publicity, but it has no basis in reality.”

She was also named in a lawsuit brought by Christina Fulton, Nicolas Cage’s ex, in California state court, who accuses Girardi Keese of stealing money she received in a car accident settlement. Attorneys for Fulton, who was Girardi’s client, say the firm funneled money meant for her into Jayne’s business and paid credit card bills for items she and her husband bought.

Jayne filed for divorce from Girardi, her husband of 20 years, in 2020 amid allegations of financial wrongdoing against him and his company. According to Today, in a season 11 episode of “RHOBH,” Jayne told her housewives, “When I filed for this divorce, I was a gold digger. This week you are a conspirator. I mean…none of them are true. “Just being out here facing millions of dollars worth of lawsuits is hard, and knowing that the person who brought you here was like that (claps hands). You think what the hell am I supposed to do?”

The divorce process has stalled as lawsuits mount against him, his former law firm and Girardi, slowing the process. According to court documents, Girardi has also been diagnosed with Alzheimer’s. Girardi recently said that she has moved away from her husband and they are legally separated, but the circumstances of their marriage make it such that she cannot really get a divorce.

“It’s ironic, but if I were divorced from Tom I would have to pay him child support. I’m staying married, thanks.” While that doesn’t mean Erika has a change of heart, it does suggest that she’s not worried about speeding up the process — although she’s still looking forward to the legal stuff being over ‘ Jayne told “RHOBH” co-star Lisa Rinne on the July 20 episode of the Bravo reality show. “I can’t get a divorce right now. For example, I’m legally separated, so my life has moved on and everything is separate. But I can’t get divorced now. There’s so much legal s*** going on. It’s a strange time and I’m really ready for it to be over.”

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