Girardi Keese Settles to Subordinate Trustee Claims
A proposed settlement would move bankruptcy claims tied to the law firm and its co-founder below unsecured creditors.
Updated on Nov. 10, 2026 in Debt Relief
The Chapter 7 trustee for Girardi Keese LLP filed a proposed settlement with co-founder Thomas V. Girardi, who is also in bankruptcy, to deprioritize their claims below unsecured creditors. The deal was filed Monday in the US Bankruptcy Court for the Central District of California.
Why it matters
The settlement would reduce recovery prospects for the law firm and its trustee relative to unsecured creditors seeking payment in the bankruptcy. It shapes how remaining assets are distributed among those owed money by the firm and its co-founder.
The proposed settlement, filed Monday by Chapter 7 trustee Elissa Miller, is pending approval in the US Bankruptcy Court for the Central District of California. Girardi's $53.4 million claim would drop below unsecured creditors if the court approves it.
The players
Thomas V. Girardi
Thomas V. Girardi is a Los Angeles attorney and co-founder of Girardi Keese LLP who is himself in bankruptcy.
Elissa Miller
Elissa Miller is the Chapter 7 bankruptcy trustee overseeing the liquidation of Girardi Keese LLP.
The details
Under the proposed agreement, the trustee for Girardi Keese LLP would accept lower recovery priority for claims against Thomas V. Girardi. The firm's separate claim against its co-founder for general partner liability, in an amount not yet determined, would also rank behind unsecured creditors.
Timeline
Monday: Chapter 7 trustee Elissa Miller filed the proposed settlement in the US Bankruptcy Court for the Central District of California.
Debt Relief Context
Chapter 7 bankruptcy trustees in the Central District of California regularly negotiate subordination agreements to resolve insider claims against individuals and firms in liquidation. The Girardi Keese proceeding is an example of how insider loan claims are often reclassified to lower recovery priority in such cases.
Creditors with unsecured claims against Girardi Keese LLP or Thomas V. Girardi may see their recovery position improve relative to the trustee's claims if the court approves the settlement. Individuals owed money by either party should monitor the bankruptcy docket for the court's ruling.
The takeaway
Insider claims in bankruptcy are often subordinated to outside creditors, so anyone owed money by a bankrupt firm or its principals should track how claims are ranked. Court dockets in the relevant bankruptcy district are the place to watch for rulings on such settlements.
Further reading
For more on how bankruptcy claims are sorted among creditors, see Debt Relief in Los Angeles.
Source note: This article includes information reported by Bloomberglaw.
