Judge Slaps Michael Avenatti Law Firm with $10M Bankruptcy Judgment

LOS ANGELES, CA - APRIL 20: Michael Avenatti, attorney for Stephanie Clifford, also known
Mario Tama/Getty Images

The Newport Beach, CA law firm of Michael Avenatti — the combative attorney representing pornographic film actress Stormy Daniels — was hit Tuesday with a $10 million bankruptcy judgment.

The Los Angeles Times reports:

Judge Catherine Bauer of U.S. Bankruptcy Court in Santa Ana ordered the Eagan Avenatti law firm to pay the $10 million to Jason Frank, a lawyer who used to work at the Newport Beach firm.

At the hearing, the U.S. Justice Department revealed that Avenatti’s firm has also defaulted on back taxes that it promised to pay the Internal Revenue Service under another bankruptcy settlement.

Under the Jan. 30 bankruptcy settlement, Avenatti personally agreed to pay the IRS $2.4 million in back taxes, penalties and interest, court records show.

Nearly $1.3 million of that was for payroll taxes that his law firm withheld from employees but did not turn over to the government.

At the hearing, Judge Bauer called the judgment “appropriate.”

The U.S. government will now file a motion to begin the collection process, according to Assistant U.S. Atty. Najah Shariff.

Avenatti told the Los Angeles Times that questions in relation to the missed payment are “irrelevant.”

“Sensational reporting at its finest. No judgment against me was issued nor do I owe any taxes,” he said.

A lawsuit filed last week in the Superior Court in Los Angeles alleged Avenatti is late to pay $2 million to Frank, who he owes a total $4.85 million.

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

Avenatti recently came under fire for allegedly threatening media outlets over the personal scrutiny he’s receiving about his past.

Following a Daily Caller report detailing Avenatti’s “questionable history,” the attorney allegedly threatened legal action against the website and the reporters behind the piece.

“Let me be clear. If you and your colleagues do not stop with the hit pieces that are full of lies and defamatory statements, I will have no choice but to sue each of you and your publication for defamation. During that process, we will expose your publication for what it truly is,” Avenatti purportedly warned in an email published by the Daily Caller.

“We will also recover significant damages against each of you that participated personally. So if I were you, I would tell Mr. Trump to find someone else to fabricate things about me.”

“If you think I’m kidding, you really don’t know anything about me. This is the last warning.”


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