According to Law.com, several of Thomas’s creditors told a U.S. District Judge they were working together on the bankruptcy petition. They told the court they would be filing the case by the end of the week.
The bankruptcy would force all of his legal issues to be handled in one spot. Thomas reportedly owes millions to his former clients and various creditors.
The bankruptcy would prevent Thomas from selling off assets or transferring money around. The court will appoint a trustee who will review all of his financial documents, coordinate with his creditors, and determine which assets can be sold off if needed.
The news isn’t surprising given Thomas is accused of embezzling millions meant for the families of plane crash victims. Earlier this year, a federal lawsuit was filed against Erika and her lawyer husband accusing them of using settlement money meant for his clients to fund their lavish lifestyle.
In the lawsuit, the plaintiffs accuse Thomas of funnelling over $20 million dollars to Erika Jayne’s company. The “Real Housewives of Beverly Hills” star has remained extremely mum on the matter and hasn’t said a word about the accusations.
The L.A. Times wrote a detailed expose on Tom’s financial affairs for the past couple of years. They note Erika’s decision to launch a music career seemed to come right as her husband was experiencing severe money woes.
The outlet says Thomas had a history of taking out high-interest loans that he kept failing to pay back.
Earlier this year, Erika decided to file for divorce following 21 years of marriage. She said they did not sign a prenuptial agreement before getting hitched. It’s unclear if a prenup really matters at this point with Thomas have a line of creditors.
In the petition, Erika cited “irreconcilable differences” as the reason for ending her union. The reality star requested her estranged husband pay her monthly support to maintain the lifestyle they lived. Thomas is fighting her on the request and wants to pay nothing.
She reportedly moved out of their $15 million Pasadena mansion and into her own $1 million Hollywood condo.
Earlier this week, the “Real Housewives of Beverly Hills” star started promoting an app where she is selling a bunch of her famous outfits for discounted prices.
Among the items, Erika is selling a Gucci cashmere jacket for $900, a Baleniago wool jumper for $450, a lightly worn $4,000 Zuhair Murad silk jumpsuit along with a pair of green Gucci trousers for $600.
Times are tough.