Michael Avenatti’s law firm filed for bankruptcy protection Thursday after his ex-partner alleged the television lawyer attempted to hide millions derived from legal fees, according to a report.
The Los Angeles Times reports Avenatti filed for bankruptcy ahead of a scheduled appearance before a federal judge in California Friday, where he was expected to testify on Eagan Avenatti’s financial situation. Jason Frank, an attorney and former partner in the firm, accused Avenatti of attempting to shield legal fees from creditors amid the company’s bankruptcy proceedings.
“Who cares? Old firm that we have not operated under for a very long time,” Avenatti said of the bankruptcy filing to the Times. “We want to ensure the proper distribution of assets to creditors — it means nothing to our current law practice. Onward and upward.”
The filing puts Avenatti’s planned testimony on hold. An attorney for Frank said in a statement that Avenatti’s testimony would have “exposed” the television lawyer’s “financial shenanigans.”
“That Mr. Avenatti would try something so desperate speaks volumes about how bad the evidence is against him,” said attorney Eric George.
In May 2018, U.S. Bankruptcy Judge Catherine Bauer ordered the law firm to pay Frank $10 million. Under a bankruptcy settlement, court documents show Avenatti agreed to pay the Internal Revenue Service (IRS) $2.4 million in unpaid taxes, fines, and interest.
The development comes after Avenatti caught a legal break in connection to his November 2018 domestic violence arrest. Last month, the Los Angeles city attorney’s office said the television lawyer will not face charges related to the arrest. An actress who alleged she had a relationship with Avenatti said that he dragged her across the floor of his Los Angeles apartment after an argument over money, court documents show.
Avenatti, a frequent critic of President Donald Trump, declined to run for the White House as a Democrat in December 2018. He remains the attorney of pornographic actress Stormy Daniels, who was reportedly paid hush money to remain silent about an affair with President Trump before he entered politics.