The United States Small Business Administration has released data showing that embattled attorney Tom Girardi has managed to receive funding through the United States government’s Paycheck Protection Program during the period of time that Girardi was being accused of stealing money from a client.
Table of Contents
- Tom Girardi’s PPP loan
- The embezzlement case of Girardi Keese law firm
- Girardi Keese’s PPP loan fraud
- Girardi Keese filing for bankruptcy
- What is the Paycheck Protection Program (PPP)
- How does Paycheck Protection Program (PPP) work
- One of many Girardi’s lawsuits
- Current operations of Girardi Keese
- How to file for bankruptcy
- Girardi on the verge of a collapse
Tom Girardi’s PPP loan
Tom Girardi, co-owner of the law firm Girardi Keese, acquired a Paycheck Protection Program loan amounting to $1.5 million on April 15, 2020, following the PPP loan application’s approval by the SBA. This occurrence has recently been discovered to have transpired in the same month that Edelson PC, an American plaintiffs’ law firm, was in contact with Girardi to confirm if settlement funds to clients in the Boeing 2018 Lion Air crash litigation have been provided; however, Girardi allegedly stole the client money.
The embezzlement case of Girardi Keese law firm
On December 14, 2020, U.S. District Judge Thomas Durkin of the Northern District of Illinois imposed a $2 million judgment against Girardi and his firm, Girardi Keese, under the allegations that Girardi Keese is guilty of embezzling client money involving the lawsuits brought against The Boeing Company after the Max 8 crash in Indonesia two years ago, back in 2018. Along with paying $2 million in court-ordered damages, Girardi and Girardi Keese’s assets are also to be frozen. In line with this lawsuit filed on December 2, 2020, allegations arose wherein it is said that in April of 2020, the law firm Girardi Keese and its litigation financiers, along with Edelson PC – Chicago’s plaintiffs firm, have consistently requested status updates regarding the settlement agreements on the 2018 Boeing’s Max 8 crash; however, employees of Girardi Keese claimed that The Boeing Company would not send the settlement funds until all of the executed settlement agreements in the litigation have been provided to them. Three months later, in July of 2020, an attorney from the Girardi and Keese law firm has indicated that The Boeing Company has finally fully funded the settlement. He also claimed that despite having been fully funded, clients of the lawsuit could not receive the full amount owed to them and received only about half the settlement fund.
Girardi Keese’s PPP loan fraud
During the same months that Edelson PC has been in contact with Girardi Keese for weekly status updates regarding the settlement agreement, an application for Paycheck Protection Program loan has been sent by Girardi Keese. The PPP funds application asserted that the law firm would be able to retain 84 employees with aid from the PPP loan. On April 15, 2020, the Small Business Administration approved the loan, which meant Girardi Keese received Paycheck Protection Program loan a few months following the initial settlement agreements in the 2018 Max 8 crash litigation. This further incriminated Tom Girardi, particularly with claims that Girardi has used embezzled money to fund an outrageous lifestyle that involved purchasing several luxury items, including paying for private jets, multiple homes, and even a $250,000 Lamborghini. There have been many other cases of others spending lavishly like here and here.
Girardi Keese filing for bankruptcy
In addition to the assets forfeiture declared by Judge Durkin during a hearing on December 16, 2020, a lawyer for a litigation funder has also announced that creditors of attorney Tom Girardi and his Los Angeles law firm, Girardi Keese, are planning to file an involuntary bankruptcy petition within the next 48 hours upon announcement. The declaration made by William F. Savino, of Woods Oviatt Gilman in Buffalo, thereby claims that the appointment of a trustee will no longer be necessary, in the case of U.S. District Judge Durkin’s call to manage the assets of Girardi and his firm.
What is the Paycheck Protection Program (PPP)
The Paycheck Protection Program (PPP) was established by the United States Small Business Administration (SBA)– an executive branch agency that has a mission to maintain and strengthen the economy of the United States, mainly through supporting small businesses and establishments to aid them in recovering from disasters in the economic sense. In line with the mission of the SBA, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted around March of 2020 to provide financial assistance to small businesses, and ultimately, to aid the millions of American citizens who are currently suffering the economic effects of the COVID19 pandemic. Under the CARES Act, the Paycheck Protection Program was initiated, with the authorization of up to $349 billion in loan funds during the first installation and additional 300 billion dollars during the second installation in April of 2020, as was authorized by the Congress for PPP funding. In total, the Paycheck Protection Program received over $600 billion in loan funds.
How does Paycheck Protection Program (PPP) work
The loans provided through the PPP are forgivable loans that are meant to be spent by eligible small businesses specifically on certain permissible expenses, such as payroll expense, job retention, among others. A qualifying business must submit a PPP loan application containing legal documents, acknowledgment report, and certifications signed by an authorized representative of the business and documents presenting the company’s average monthly payroll expenses, employee count report, and business statements. The PPP loan applications are received by an SBA-approved lender. The participating lender shall determine if the small business is eligible and shall fund the small business using its own monies once deemed qualified. Proceeds from the Paycheck Protection Program shall solely be used by the business applicant on certain permissible expenses. The loan funds shall only be entirely forgiven if the small business is able to spend the loan only on expenses such as interest on mortgages, payroll costs, rent, and utilities during a designated period. It is necessary that the small business also spend a specific percent of the PPP proceeds, particularly on payroll expenses, to be qualified to have their Paycheck Protection Program loan completely forgiven.
One of many Girardi’s lawsuits
The complaint charged in early December happens to be one of several other lawsuits, which alleges that Girardi had embezzled money intended for the firm. Litigation funders such as the California-based funder – Law Finance Group and the Arizona-based lender – Stillwell Madison have also gotten involved with Tom Girardi for suing the attorney and his firm, Girardi Keese, after failing to repay millions in loans. Tom Girardi also faces a $6.2 million judgment, made by a California Attorney Lending.
Not only is Girardi entangled in a class-action lawsuit over embezzled funds in relation to settlement money for the Lion Air crash, but he is also facing a lawsuit made by Wells Fargo Financial Services, accusing Girardi of breaching a written agreement, as well as in his conversation with the bank. Due to the recent uprise of allegations, Girardi’s law firm partner, Robert Keese, is also filing a case against Girardi to dissolve their 1126 Wilshire Partnership business venture, while claiming that Tom Girardi was not able to pay about $315,000 from the income his partners were to gain from said partnership, and alleges that Girardi used the money for personal expenses. The expenses that were asserted in the documents include a property valued up to $7,460,000, in which Girardi took out loans without the knowledge of his partners. The legal documents also claim that his partners suffered a loss in the equity of approximately $442,500 each. They are looking to receive compensation through dissolving the partnership and liquidating the firm’s assets. Moreover, the three plaintiffs that are Girardi’s partners are also demanding punitive and compensatory damages.
Current operations of Girardi Keese
The bankruptcy petition made by the law firm, Girardi Keese, during the hearing at which the firm is being held in contempt of court orders for failing to pay six clients, has made several points regarding the business operations of Girardi Keese. Edelson noted that Girardi Keese represented 8,000 to 10,000 clients. He claimed that they are concerned about taking care of these clients, including those involved in the 2015 Aliso Canyon gas leak in a suburban neighborhood of Los Angeles. Girardi’s lawyer further insisted on gaining ‘forensic evaluation’ for Tom Girardi, claiming that a third party may offer to pay for a trustee to supervise the proceedings. The law firm, Girardi Keese, is said to have $15,000 left in its operating bank account currently. The firm is also said to have had its lawyers down to from only about 20 to five lawyers.
How to file for bankruptcy
Filing for bankruptcy may aid an individual in discarding debt or making plans to compensate for said debts. The process of a bankruptcy case begins initially with a filing for a bankruptcy petition, and the petition is to be registered by a debtor, who may be an individual, spouse, a corporation, or a different entity, in court. By filing for bankruptcy, several individuals can get a fresh start by liquidating assets to pay the debts they owned or by creating a repayment plan. There are several types of bankruptcies, but all of which are handled in federal courts under rules outlined in the U.S. Bankruptcy Code. The bankruptcy laws may also protect a financially troubled business.
It is highly recommended that individuals or entities looking to file for bankruptcy to seek legal advice from a qualified lawyer as a bankruptcy case imply long-term financial and legal consequences; however, an individual may file for bankruptcy without a lawyer through filing/
Girardi on the verge of a collapse
Tom Girardi is the founder and co-owner of the Girardi & Keese. This law firm was established in 1965, which has now successfully recovered over $3 billion against several large and powerful companies. Girardi, while on the verge of a financial collapse, and facing large sums of debt, is also currently in the middle of a messy divorce with his wife, Erika Jayne – a star from the show The Real Housewives of Beverly Hills. Despite having filed the divorce publicly, it is believed and alleged in a lawsuit that the divorce settlement is an attempt to fraudulently seek protection for the assets owned by both Girardi and Jayne. The lawsuit further stated that Girardi had been consecutively engaging in fraudulent and deceptive conduct, which is presumed to be the way to keep up with their lavish lifestyle.