A bankruptcy trustee wants to auction off Tom Girardi’s personal belongings at his 10,277-square-foot home in California, including a Steinway piano and artwork.
In a motion filed on Tuesday, the trustee asked a bankruptcy judge for approval to hire an auction house to sell the items, which also include furniture, clothing and sports memorabilia. The proposed live auction would take place on Sept. 21, both online and via telephone, with private viewing of the items allowed prior to the event by appointment.
“The debtor’s personal property that the trustee will seek to auction and sell includes the following: a Steinway piano, furniture, art, religious icons, statues, lamps, rugs, ceramics and glassware, clothing and shoes, and sports memorabilia,” wrote Carmela Pagay, a partner at Los Angeles-based Levene, Neale, Bender, Yoo & Golubchik, who represents the trustee, Jason Rund, in Girardi’s Chapter 7 case. “The sale of the personal property will provide funds from which unsecured creditors may be paid.”
On the market for $7.98 million, the price of Girardi’s home in Pasadena, California, has been reduced five times since its original listing of $13 million. The proposed auction house, John Moran Auctioneers, in Monrovia, California, previously sold the estate of Hollywood actor Steve McQueen and various individual pieces of fine art over several decades.
The auctioneer, which estimated Girardi’s belongings could fetch between $191,300 and $280,700, would charge a 6% commission plus a 25% buyer’s premium. After those payments, and other fees, the trustee estimated the estate could get $135,000 to $207,000.
He proposed a July 12 hearing on the matter.
The move comes as Rund and the trustee for the Chapter 7 case of Girardi Keese, Girardi’s former Los Angeles law firm, attempt to generate funds for each bankruptcy estate. Hundreds of creditors, including litigation financiers, former clients, law firms and vendors, have made claims against the estates totaling as much as $500 million.
One of the larger assets is Girardi’s home, which has extensive outdoor landscaping, a library and guest suite, and has been featured on “The Real Housewives of Beverly Hills,” which stars Girardi’s estranged wife, Erika Girardi.
The holder of a second deed of trust on the home has moved to lift the bankruptcy stay in order to record a notice of default and conduct a foreclosure sale. Arsani Sidarous claims in a June 9 motion that Girardi owes $3.23 million on a loan with mortgage lender ALT Financial Network in Irvine, California, including interest, late charges and advances, which came due on Nov. 1. Since Sept. 1, 2020, Girardi has missed 21 payments. Chase, which holds a first deed of trust, is owed $2.58 million.
Sidarous estimated there were $23.4 million in judgment liens against the home from litigation financiers, former clients and Girardi’s first wife, plus delinquent property taxes. That means Girardi, he wrote, has no equity in the property.
“Sidarous appreciates trustee’s efforts but the time has come to grant stay relief when considering no payments have been made to either Chase or Sidarous for over 1 ½ years,” wrote Robert Goe, of Goe Forsythe & Hodges in Irvine, California, who represents Sidarous.
Goe declined to comment.
Rund has disputed the lien amount, noting that he has reached settlements with the former clients and litigation financiers. His lawyer, Pagay, said there was a 19.5% “equity cushion” in the property, which, if sold at $7.98 million, would generate $1.1 million in net proceeds.
“While the sale price for the property has been reduced to attract offers,” she wrote in a Tuesday filing, “there is sufficient equity in the property for the estate.”
The trustee’s filing listed several offers from buyers, including Ronald Richards, a Beverly Hills attorney who at one time served as special counsel to the Girardi Keese trustee.
In a separate June 10 filing, Girardi’s first wife, Karen Girardi, who divorced him in 1989, said she didn’t oppose the stay being lifted but clarified that her ex-husband owes her $245,000 in missed support payments, not the $95,000 estimated by Sidarous. Girardi had agreed to pay her $10,000 per month as part of their divorce.
A hearing on the mortgage lender’s motion is set for July 5.
Originally posted on law.com