Erika Jayne has been accused of trying to slow down a $5 million fraud lawsuit brought against her by refusing to file her company’s taxes.
The law firms of Philip R. Sheldon and Robert P. Finn, which are suing Jayne, 50, claim she is trying to ‘gain an unfair advantage in the litigation,’ according to court filings obtained by Page Six.
The declaration, which was filed Thursday in the California Superior Court, accuses the reality star of being aware that her company EJ Global was suspended by the California Franchise Tax Board, which they allege has delayed the lawsuit’s discovery process.
Going slow: Erika Jayne, 50, was accused of trying to delay a $5 million fraud lawsuit against her in court filings obtained by the Page Six on Thursday; seen in May in NYC
The filing also claims that Jayne has been aware of the suspension since at least February 5 of this year.
‘Yet, 110 days later, EJ Global has done nothing to get the LLC out of suspended status,’ wrote the attorney Ronald Richards, who represents the law firms.
According to Richards, his clients aren’t able to properly access EJ Global’s documents via discovery because of the suspension, and the delay might help Jayne’s position.
‘Plaintiffs cannot wait any longer as now Erika Girardi is using the suspension to gain an unfair advantage in the litigation,’ he added.
The law firms have filed suit against Jayne and Girardi, accusing them of fraud and breach of contract.
They claim they went unpaid after they should have received a portion of lawsuit settlements managed by Girardi’s law firm Girardi & Keese.
Taking her time: Attorney Ronald Richards accused Jayne of not moving to get her LLC EJ Global out of a suspension by the California Franchise Tax Board; seen with Tom Girardi in 2016
They claim that the missing money was transferred to EJ Global, where it allegedly helped pay for Jayne’s luxurious purchases.
Girardi allegedly gave her $25 million over the course of 12 years, but Richards claims his clients deserve $5 million of that sum.
The clock is ticking, as a hearing is scheduled for July 21, 2022.
In his filing, the attorney urged the court to order Jayne to file EJ Global’s tax returns, which would be necessary to get it out of the suspension, within 10 days starting on Thursday.
But Evan C. Borges, who represents Jayne in the ongoing lawsuit, tried to shift the blame for the suspension to her estranged husband Tom Girardi, who suffers from Alzheimer’s disease and has been staying at a senior living community that specializes in memory care.
‘The EJ Global LLC suspension is part of the mess that Tom Girardi [TG], Girardi &Keese [GK], and their outside accountants dumped on Erika and left her to sort out — with no access to records,’ Borges claimed in a statement to Page Six from Thursday.
He alleged that Girardi, along with Girardi & Keese and its accounts, had ‘always managed the finances of EJ Global LLC, not Erika.’
No rush: Richards alleges that Jayne knew the LLC was suspended since February, and she would have to file its taxes to end the suspension, which she has not yet done; still from RHOBH
That would suggest that the financial records needed to properly file the LLC’s taxes were held by the accountants who previously worked for the company.
Jayne’s lawyer added that she was the ‘interest holder’ of the LLC, but he claimed it was ‘virtually impossible’ for her to ‘figure out how to file tax returns without any financial records.’
‘We have not given up trying, but without any of the records, it is an extremely difficult task. The Sheldon plaintiffs and their Twitter attorneys have no case,’ he claimed in the statement.
‘Their entire case is based on unethical fee splitting agreements with GK, which are unenforceable,’ he added.
The outlet also reported that Borges previously filed a motion on May 17 requesting that Jayne’s financial records be kept private.
He claimed in the filing that ‘information in the Confidential Documents has no bearing on or relevance whatsoever to any of the claims or defenses in this action.’
Shifting blame: Jayne’s lawyer disputed the allegations and said that Girardi, his law firm and its accounts were responsible for tax filings for Jayne’s LLC
In a response, Richards accused Borges’ motion of being ‘meritless,’ and he said his clients were ‘hamstrung from using the identity [of EJ Global’s funding source] to explain why Plaintiffs are investigating where their money went or why they are asking about certain individuals.’
Asked about his request to keep Jayne’s financial details confidential, Borges told Page Six that his motion ‘speaks for itself.’
He accused the plaintiffs in the lawsuit of trying to ‘publicize’ how his client ‘obtained funds from another citizen to help her pay her bills.’
Borges also suggested in his statement that the fact that she received help means she couldn’t be hiding a large amount of funds from the plaintiffs.
‘The fact that Erika has needed assistance from others to pay her bills shows that there is no hidden treasure she ever took for herself that really belongs to the bankruptcy estates of Girardi or Girardi & Keese.’
Turning the tables: Jayne’s attorney claimed that the plaintiffs in the suit acted with her ex Girardi to ‘violate ethical rules’; still from RHOBH
Borges’ statement accused the plaintiffs of seemingly wanting to embarrass Jayne, as he claimed the Girardi & Keese trustee had previously received the information due to the plaintiffs’ ‘threat of pay me money “or else” I go public.’
He concluded by claiming that his client wanted to ‘protect EJ Global LLC,’ but she wouldn’t ‘pay its taxes and as a matter of law, cannot shield her LLC from this case while it is suspended.’
The lawyer also suggested it was ridiculous that his client, ‘as a non-lawyer with a separate career an entertainer, somehow ran the finances of the law firm and somehow participated in the decisions made by TG and GK not to pay an illegal fee-split to the Sheldon plaintiffs.’
Legal woes: Jayne was hit with a $2.1 million lawsuit in February 2021 and a $50 million racketeering lawsuit just last month; seen in December in Santa Monica
This is just the latest legal trouble for Jayne, who was previously named in a $2.1 million lawsuit in February of last year for allegedly aiding her estranged husband’s embezzlement scheme.
Her situation got even more dire in April of this year, when she was targeted with a $50 million racketeering lawsuit.
Her ex has been accused of embezzling settlement funds intended for the families of victims of Lion Air Flight 610, which crashed into the Java Sea in 2018, killing all 189 passengers and crew aboard it.