In re: Girardi Keese

I. BACKGROUND

In December 2020, the creditors of the law firm Girardi Keese filed an involuntary Chapter 7 bankruptcy case against the law firm and an involuntary Chapter 7 bankruptcy case against Thomas (Tom) Girardi. BR 21-ap-01155, Dkt. 28 (Turnover Mot.) at 4. Upon her appointment, the Trustee began to investigate and scrutinize Girardi Keese’s business records. She discovered a suspicious withdrawal from a client trust account Girardi Keese managed in connection with the Rezulin litigation – a mass tort action on behalf of diabetes patients in which Girardi Keese was counsel for certain plaintiffs. Id. at 1. The Trustee found a check drawn on March 2, 2007 from the Girardi Keese Rezulin Trust Account (RTA) in the amount of $750,000, payable to M&M Jewelers. Id. at 5. The ledger entry for the RTA identified the $750,000 payment as “costs” and provided no further description. Id. The check was signed by both Tom Girardi and then-Girardi Keese partner James O’Callahan. Id. at 6. The Trustee also discovered a letter from Tom Girardi indicating that in 2007, he bought Appellant $750,000 earrings to replace a pair of hers that had been stolen. Id. Upon discovering this…