According to court documents obtained by The Blast, the bankruptcy judge has approved the motion brought by his creditors asking for a trustee to be appointed. The trustee will be put in charge of handling all of Thomas’s assets. They will be able to seize property to sell off to pay Erika’s husband’s various debts.
Prior to the judge signing off, the creditors filed motions pleading with the court to take action or risk Thomas’s clients being screwed out of money they are owed.
One argued, “If an interim trustee is not immediately appointed to take control of Debtor’s files and retain counsel to evaluate Debtor’s cases and/or continue to prosecute cases, I believe there will be a substantial amount of damage to Debtor’s clients and Debtor and/or the Estate will lose the opportunity to collect substantial attorneys’ fees which can be used to pay creditors.”
As The Blast previously reported, last month, Thomas’s former law partner, along with his various creditors, filed an involuntary petition for Chapter 7 bankruptcy for Thomas and his law firm. They accused him of owing millions and said he has refused to cough up the money despite repeated promises.
The documents read, “The debtor is generally not paying such debtor’s debts as they become due.” The creditors include his former law partners, Robert Keese and Jill O’Callahan. Jill says she is owed $757,000 and Robert says Thomas owes him over $1,5 million
One creditor accuses Thomas of taking out massive loans to continue to fund his “lavish lifestyle.” They wrote, “Having secured tens of 27 million dollars in loan proceeds (upon information and belief, a total of more than $39,000,000), from five different lenders, GK and Girardi had created a web of deceit surrounding the law firm, its financing and its collateral that was bound to disastrously unravel which it did.”
The judge signing off on appointing the trustee means the bankruptcy will move forward with Thomas’s cooperation or not. He has yet to file opposition paperwork in the case or hire a lawyer to defend him in the bankruptcy court.
The “Real Housewives of Beverly Hills” star has remained radio silent since her estranged husband’s financial issues started mounting. As The Blast previously reported, Erika is a named defendant in a massive federal lawsuit brought against Thomas and his law firm.
In the suit, the plaintiffs are widows and orphans who lost a loved one in a plane crash. They were represented by Thomas in a lawsuit where they won a settlement. Thomas is accused of not paying out the millions owed to the victim’s families. In the suit, the families say they believe he diverted the money to fund his over-the-top life with Erika.
One creditor believes Thomas sent nearly $20 million to Erika’s entertainment company in an attempt to hide the money from creditors.
The creditors will now fight it out in bankruptcy court to try and get a portion of the debt owed to them.