Judge Shuts Out Media From Avenatti Firm’s Bankruptcy Hearing

(CN) – A federal judge agreed to seal court transcripts and bar media from attending a court hearing involving the bankruptcy proceedings of attorney Michael Avenatti at his request on Wednesday, according to multiple news outlets.

The hearing was related to bankruptcy proceedings involving a former partner. Avenatti is currently representing former adult film star Stormy Daniels in her lawsuit to get out of a hush agreement with President Donald Trump over an alleged affair and $130,000 payment. Judge Catherine Bauer barred reporters from the hearing.

Michael Avenatti, an attorney for porn actress Stormy Daniels, stands outside the Los Angeles Superior Courthouse on July 10, 2018. Avenatti is named as a defendant in a former Playboy model’s lawsuit against a top GOP fundraiser. (Martin Macias Jr./CNS)

According to California-based attorney and former partner Jason Frank, he is owed payment as part of a settlement stemming from work Frank did for Avenatti’s firm Eagan Avenatti.

Frank says he was promised 25 percent of the firm’s annual profits and 20 percent of the fees he generated from clients.

He sued and won a $10 million judgment. In December 2017, Eagan Avenatti and Frank settled the case for $4.85 million – with $2 million due by May 14 and the balance 60 days later – and Avenatti guaranteed the agreement.

But according to Frank, Avenatti missed the $2 million payment. Frank quickly followed up with a lawsuit in Los Angeles Superior Court against the law firm.

Frank says 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.”

Frank subpoenaed Avenatti, who is a managing partner of the law firm and he was ordered to appear in a U.S. Bankruptcy Court in Santa Ana. Eagan Avenatti was also delinquent on payroll taxes, according to court records. The firm settled its case with the IRS on Wednesday.

Avenatti’s attorney, Hamid Rafatjoo, argued to have the media barred from the courtroom while his client testified, according to the Los Angeles Times and CNN.

Avenatti did not want anyone in the room during the judgment debtor exam, a hearing where a person is required to answer questions under oath regarding finances and if one can repay back their creditors.

A request to seal the transcript from the hearing was not immediately granted, but attorneys from the news outlets met with another bankruptcy judge in Santa Ana on Wednesday afternoon to voice their objections, according to the Los Angeles Times.

Their request to gain access to the hearing was denied, according to multiple outlets.

Transcripts from the hearing will remain under seal, according to the court.

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