Here's a dirty little Hollywood secret that may shock you to the core: Reality shows are totally fake. Don't believe me? Take Erika Jayne and ex-husband Tom Girardi. The Girardis first became famous in 2015 when Erika joined the cast of "The Real Housewives of Beverly Hills." While you might assume that this show's stars are required to be residents of the 90210 zip code, in reality, Tom and Erika lived about an hour away in the 91105 zip code, also known as Pasadena.
Let me say right now that even if you don't care at all about "The Housewives" and have never heard of Erika Jayne or Tom Girardi, you're going to find the story of their recent financial upheaval fascinating. Just a few years ago, Tom estimated his net worth at $264 million, but he recently claimed to have no money at all and was forced into bankruptcy. Their financial turmoil led to their breakup, and today they are seeking buyers for their Pasadena mansion, listed at $13 million. All proceeds will reportedly go towards paying down roughly $60 million worth of debt.
The King of Class Actions
Tom Girardi earned his fortune through class action lawsuits against major corporations. His firm, Girardi & Keese, was a pioneer in taking on significant cases on a contingency basis, meaning clients paid no money upfront, and in return, the lawyers took 25-40% of the final judgment amounts. This business model made Tom extremely wealthy.
In one of Tom's most notable cases, he represented the residents of Hinkley, California, in a class action lawsuit against Pacific Gas & Electric. He and a team of lawyers sued PG&E, alleging that the company caused Hinkley residents to develop various forms of cancer due to groundwater contamination. Tom and his team emerged victorious, with a jury awarding a $460 million judgment to be paid by PG&E to 650 residents, which inspired the 2000 Julia Roberts film "Erin Brockovich".
Massive Settlements and Recognition
Over the decades, Tom's law firm won billions of dollars for its clients. His largest settlement was a staggering $4.85 billion from pharmaceutical company Merck, related to the pain medication Vioxx.
In 2014, Tom was inducted into the Trial Lawyer Hall of Fame, a prestigious recognition of his contributions to the legal field.
The Rise of Erika Jayne
In a 2015 loan application, Tom estimated his personal net worth at $264 million, the same year his wife Erika Jayne began starring on "The Real Housewives of Beverly Hills." The couple has a significant age gap of 40 years; when they married two decades ago, Erika was in her 20s, and Tom was in his 60s. They met at a Beverly Hills restaurant where Erika worked as a waitress.
On the show, Erika and Tom showcased their lavish lifestyle, with their 1.7-acre mansion in Pasadena, private jets, and expensive jewelry. They made it seem like money was no object, spending freely on personal luxuries.
The Downfall
So, what caused the financial upheaval for Erika and Tom? Today, Tom reportedly owes $57 million to various legal finance firms and hedge funds that lent him money over the years. In December 2020, the debts from these loans forced Girardi & Keese to file for bankruptcy. Following this, Tom and Erika's assets were frozen, and just a month before the bankruptcy filing, Erika filed for divorce.
Allegations of embezzlement surfaced, with clients claiming they were shorted millions in settlement distributions. Furthermore, there were accusations that Tom and Erika used client funds to sustain their extravagant lifestyle, which included two private jets and $40,000 spent monthly on Erika's hair, makeup, and clothing.
Claims of Financial Misconduct
In a deposition in 2020, Tom claimed: "At one point, I had about $80 million or $50 million in cash. That's all gone. I don't have any money." He also reportedly held $50 million in stocks at one point, but by the end of 2020, his stock portfolio was nearly worthless.
Salacious accusations emerged regarding funds allegedly transferred to Erika in the years leading up to their financial collapse. According to court testimony, a creditor claimed that Tom transferred at least $20 million to Erika's entertainment company. Plaintiffs in the bankruptcy case argued that Tom and Erika's divorce was a "sham" and that she was sitting on that $20 million.
The Aftermath
Unfortunately, even if creditors recover that $20 million, along with whatever proceeds are generated from selling their Pasadena house, they'll still be around $25 million short of the total alleged debt of $57 million.
Erika remains a main cast member of "The Real Housewives of Beverly Hills." Currently, she is reportedly living in a $10,000-per-month rental in Hancock Park, an LA neighborhood that is at least 30 minutes away from Beverly Hills even in light traffic.
This saga is a stark reminder of how quickly fortunes can change in the world of reality television and the legal industry, and it raises important questions about authenticity and accountability in both realms.
