The LA Times is reporting that Avenatti’s law firm just got socked in the mouth with a judgment of $10 million dollars, for failing to pay his former colleague what he owed him:
LA TIMES – The law firm of Stormy Daniels’ attorney Michael Avenatti was hit with a $10 million judgment Tuesday in U.S. Bankruptcy Court after he broke his promise to pay $2 million to a former colleague.
Judge Catherine Bauer of U.S. Bankruptcy Court in Santa Ana ordered Eagan Avenatti to pay the $10 million to Jason Frank, a lawyer who used to work at the Newport Beach firm.
“At this point, that’s what’s appropriate,” Bauer said at a brief hearing.
To settle his law firm’s bankruptcy, Avenatti had personally guaranteed that the $2 million would be paid to Frank last week, but both he and his firm failed to turn over the money.
But that’s not all. Avenatti has also defaulted on back taxes:
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.
Assistant U.S. attorney Najah Shariff told the judge that the federal government would soon file a motion demanding payment of the back taxes.
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.
Avenatti responded to the article on Twitter:
Nonsense. Completely different law firm - no ties to Daniels case. Irrelevant. Over blown. Sensational reporting at its finest. Check the facts next time please and report accurately.
— Michael Avenatti (@MichaelAvenatti) May 22, 2018
The LA times refutes this and is standing by their story:
Avenatti is the lead equity partner in Eagan Avenatti, court records show. He has repeatedly sent emails to The Times about the Daniels case from an Eagan Avenatti email address, with Eagan Avenatti below the signature line.
Dang! Wonder how much the judgment on his back taxes will be? That seems more serious considering it included withheld payroll taxes from employees.
I’m sure he can’t wait to find out.