Stormy Daniels’ attorney Michael Avenatti accused of stiffing law partner on $2 million debt

Stormy Daniels’ attorney Michael Avenatti accused of stiffing law partner on $2 million debt

Stormy Daniels' attorney Michael Avenatti holds a press conference outside Federal Court after a hearing for Trump's attorney Michael Cohen at 500 Pearl Street in Manhattan on Thursday April 26, 2018. (Susan Watts/New York Daily News/TNS)

Michael Finnegan|
Los Angelos Times (TNS)

May 17, 2018

Michael Avenatti, the attorney for porn actress Stormy Daniels, broke his promise to make a $2 million payment that was due Tuesday under the settlement of his firm’s bankruptcy, a new lawsuit alleges.

To resolve the bankruptcy, Avenatti promised in December to pay $4.85 million to Jason Frank, a former lawyer at Avenatti’s Newport Beach law firm.

The first $2 million installment was personally guaranteed by Avenatti, according to the suit that Frank filed Wednesday in state Superior Court in Los Angeles.

“Avenatti has no valid excuse for failing to perform this obligation,” the suit says.

A document filed with Frank’s complaint reveals that an arbitration panel of three retired judges found in February 2017 that the firm, Eagan Avenatti, “acted with malice, oppression and fraud” by hiding its revenue numbers and failing to give copies of its tax returns to Frank, as the panel had ordered.

The lawsuit casts Avenatti in a harsh light at a time when he has emerged as one of President Donald Trump’s chief antagonists in the media. His cable news stints are so frequent that late-night comedians joke about his overexposure.

Some critics have questioned whether Avenatti’s media strategy serves the interests of Daniels in her litigation against Trump and his former personal lawyer, Michael Cohen.

Daniels, whose real name is Stephanie Clifford, is seeking to invalidate a nondisclosure agreement that bars her from talking publicly about a sexual encounter she says she had with Trump in 2006 in Lake Tahoe.

Avenatti, whose pattern of unpaid taxes has yielded millions of dollars in IRS liens over the last decade, did not address the specifics of Frank’s allegations in an email responding to the lawsuit.

“Frivolous and baseless,” the lawyer wrote. “Old news. Who cares?”

He said the arbitration panel “never found fraud” despite the document showing that, in fact, it did. The retired state Superior Court judge who signed the panel’s order sanctioning Avenatti’s firm is Terry B. Friedman.


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