Avenatti's Troubles Worsen: Bankrupt Firm Hit With New $10 Million Judgment

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

Frank, who used to work at the Eagan Avenatti law firm, was personally promised by Avenatti that he would receive $2 million of a settlement of a bankruptcy case by May 14. That money was never paid, the court determined.

Michael Avenatti’s Law Firm Just Got Hit With A $10 Million Judgment https://t.co/sO7hUHiqhj pic.twitter.com/sPyWP93ruk

— Daily Caller (@DailyCaller) May 22, 2018

“At this point, that’s what’s appropriate,” Bauer said at a brief hearing, as reported by The Los Angeles Times.

Avenatti personally guaranteed in December that the firm would pay Frank $4.85 million as a bankruptcy settlement, with the initial $2 million due last week. But when the $2 million installment wasn’t paid, the court slapped the firm with Tuesday’s judgment.

And that’s not the only promised payment Avenatti has failed to make in the past week.

That payment is part of an agreement Avenatti and his firm reached with the Internal Revenue Service in January to pay the IRS a total of $2.4 million. An initial payment of $1.5 million was made in that settlement, but nothing has been paid since.

Avenatti’s excuse? The taxes were supposed to be paid by a third-party payroll company used by the firm — a firm Avenatti never identifies.

Avenatti, who appears to welcome the media spotlight when he can use it to attack President Donald Trump on behalf of Daniels, is rather disdainful of the media when it wants to know why he and his former law firm owe so many people so much money.

When asked by the Times about the judgments issued against his firm Tuesday, Avenatti acted as if the media were talking to the wrong person. “Irrelevant,” he wrote in an email to the paper in response to questions about the $10-million judgment and the missed tax payment. “Over blown. Sensational reporting at its finest. No judgment against me was issued nor do I owe any taxes.”

It’s true that Avenatti’s bankrupt firm, not the individual, is supposed to be forking over the millions. But as the man whose name appears on the numerous lawsuits and judgments that have been filed against his businesses, it’s fair to assume he has something to do with why promised payments haven’t been made.

And it was Avenatti himself who agreed to the deadlines for making the $4.85 million in payments to Frank, so why does he appear more angry at the media for reporting on the judgment than the court that issued it?

Perhaps he is trying to dissuade the media from delving into the 45 other lawsuits that have been filed against the coffee companies Avenatti once owned — Global Baristas LLC and Global baristas US, LLC — including a $120,000 payment that a Seattle judge ordered to be paid to a woman who won a sex-discrimination case in October against Avenatti’s companies, saying she was fired after becoming pregnant, according to a report by The Daily Caller.

After Avenatti’s companies failed to make the payment by February, the judge ordered the funds to be garnished from the company’s bank account. But when the garnishment was attempted, the bank said it had no account for the company in question.

While Avenatti the person has tried to hide behind Avenatti the corporate entity, his personal reputation isn’t squeaky clean when it comes to paying taxes, either. The Times discovered unpaid 2009 and 2010 income taxes led the IRS to put a $904,000 lien years later on all of his personal property in Orange County, California.