Avenatti Ordered to Pay $4.85 Million to Ex-Associate

Michael Avenatti is interviewed in New York, May 10, 2018. (AP Photo/Mark Lennihan, File)

LOS ANGELES (CN) – A Los Angeles judge on Monday ordered attorney Michael Avenatti, who represents adult film star Stormy Daniels in her lawsuit against President Donald Trump, to pay a former law partner $4.85 million as part of a settlement agreement.

Jason Frank, a former employee at Avenatti’s law firm, and his attorney said they were pleased with Los Angeles County Superior Court Judge Dennis J. Landin’s ruling. Avenatti was not present at the proceedings.

Frank worked with Avenatti’s Newport Beach law firm Eagan Avenatti and claimed the firm owed him millions for unpaid work as an independent contractor. The case was settled with Avenatti personally guaranteeing a payout of $4.85 million.

But this past May, Avenatti and his law firm missed a $2 million payment and Frank sued. He sought the payment plus interest, fees and costs and a right-to-attach order in Los Angeles Superior Court.

Frank said Eagan Avenatti ducked arbitrating his claims after a “purported creditor” filed to put the firm in involuntary bankruptcy. According to Frank’s complaint, the bankruptcy judge said the “‘involuntary case has a stench of impropriety.’”

According to Frank’s complaint, U.S. Bankruptcy Judge Karen Jennemann wrote, “‘I don’t have any real confidence that [Eagan Avenatti is] going to stay in this bankruptcy or any other bankruptcy, and that whether [the creditor] has some relationship with the firm that would have induced a collusive filing or Eagan Avenatti just got plain lucky and someone filed on the eve of arbitration.’”

During the settlement proceedings, Avenatti was given two days to put his firm into bankruptcy, which he did.

After Avenatti missed the $2 million payment, U.S. Bankruptcy Judge Catherine Bauer granted the $10 million judgment Frank sought during the arbitration proceeding, according to a report by the Los Angeles Times.

At a hearing this past July, Avenatti asked Bauer to block the media from a debtor exam hearing, during which the person who files for bankruptcy must answer questions under oath regarding finances and whether they’re able to repay their creditors. Bauer agreed and also sealed transcripts of the proceeding.

On Oct. 19, Avenatti sought to move Frank’s lawsuit to federal court. Frank’s attorney Eric George from the LA firm Browne George Ross called Avenatti’s request to move the case a baseless tactic.

In court documents, George wrote, “We can imagine the peals of laughter accompanying his filing, made with ostensible belief he dodged summary judgment.”

Prior to Monday’s hearing, Avenatti told The Daily Beast, “Nothing’s gonna happen on Monday, so you guys are wasting your time.”

On Monday, Judge Landin denied Avenatti’s request to move the case.

Outside the courtroom, George said of Avenatti, “He’s delayed, with tactic after frivolous tactic. That came to an end today. My client has had an awful lot of money owed to him for a lengthy period of time.

“This is now a collection effort,” he added.

Frank said he was pleased he could “collect the money that was owed to him for five years.”

When reached for comment by email, Avenatti said, “Any judgment issued against me will be deducted from the over $12 million that Jason Frank owes me and my law firm Avenatti & Associates as a result of his fraud.”

During bankruptcy proceedings, Avenatti claimed Frank and two other former associates were stealing clients and competing with the law firm.

Meanwhile, a court in Orange County OK’d the eviction of Eagen Avenatti from its digs in Newport Beach after not paying rent for four months, the LA Times reported Monday.

According to court documents, the law firm owes $213,254 in back rent to The Irvine Company. The company did not respond to an email seeking comment, and Avenatti remained mum on both court actions as of Monday afternoon.

Recently, Avenatti has been stumping across the country with an eye toward a possible 2020 presidential run.

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