Law Firms

Defunct former firm of Stormy Daniels' lawyer is ordered to pay $10M to ex-partner

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The defunct former law firm of Stormy Daniels’ lawyer, Michael Avenatti, has been ordered to pay $10 million to a onetime partner who claimed the it failed to pay him money owed for legal work.

U.S. Bankruptcy Judge Catherine Bauer issued the order of judgment on Tuesday after the former firm, Eagan Avenatti, missed a deadline to make a $2 million payment under an agreement to pay $4.85 million to resolve the pay claims of former partner Jason Frank, report the Los Angeles Times, Law360 and Bloomberg News. Avenatti himself had personally guaranteed the $4.85 million.

Frank had filed a motion to reopen the bankruptcy and enter judgment for the full $10 million when he did not receive the $2 million payment. The case was previously in arbitration, but two days before Avenatti was scheduled to testify, a Florida creditor filed a petition to place Eagan Avenatti into involuntary bankruptcy over an unpaid invoice of $28,700, according to a suit filed by Frank against the law firm last week.

A federal prosecutor told Bauer during Tuesday’s hearing that Eagan Avenatti also owes $440,000 in back taxes, penalties and interest that was supposed to have been paid last week. The firm had previously made an initial payment of $1.5 million under an agreement to pay $2.4 million, according to the Times. Avenatti has said the unpaid taxes are the fault of a payroll company.

Avenatti is representing Daniels, and adult-films star, in a suit against President Donald Trump that seeks to void a confidentiality agreement.

Avenatti said Eagan Avenatti has no ties to the Daniels case.

“Irrelevant. Overblown. Sensational reporting at its finest. No judgment against me was issued. Who cares?” he wrote in an email to Law360.

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