Law & the Courts

Judge Orders Avenatti to Pay Former Law Partner $4.85 Million

Michael Avenatti, lawyer for adult film actress Stephanie Clifford, also known as Stormy Daniels, speaks outside the U.S. District Court for the Central District of California in Los Angeles on September 24, 2018. (REUTERS/Andrew Cullen)

A Los Angeles judge on Monday ordered Michael Avenatti, the attorney for porn star Stormy Daniels, to pay his former law partner $4.85 million in unshared profits generated by their former law firm.

Los Angeles Superior Court judge Dennis Landin dismissed Avenatti’s request to move the case to federal court, ruling instead that the high-profile lawyer had failed to uphold the terms of a settlement he reached with his former partner, Jason Frank, in December 2017.

Avenatti agreed, as part of that settlement, to pay Frank the $4.85 million in withheld profits in two installments, the first of which was due in May. Avenatti never made either of the agreed upon payments, prompting Frank to sue once again.

A U.S. bankruptcy court ruled in a separate case in May that Avenatti’s former firm owed Frank $10 million in back pay. Avenatti now personally owes Frank $4.85 million on top of that payment.

Avenatti, who has appealed the ruling, told National Review that Frank actually owes him $12 million in connection with a fraud perpetrated against his law firm.

“Any judgment issued against me will be deducted from the over $12 million that Jason Frank owes me and my law firm Avenatti & Associates as a result of his fraud. We look forward to receiving his check in the amount of over $7 million,” Avenatti said.

Less than an hour after Landin ruled against Avenatti, a judge in Santa Ana, Calif. ordered that his law firm, Eagan Avenatti, be evicted from its office suite for failing to pay rent for the last four months.

The formerly anonymous attorney has established himself as a cable-news pundit and political activist since representing Daniels in her effort to be released from a non-disclosure-agreement she signed in exchange for $130,000 after threatening to expose her alleged 2006 sexual encounter with Donald Trump. Avenatti subsequently filed a defamation suit on behalf of Daniels, which was dismissed by a federal judge last week.

“I just beat him in a big case. . . . [I] beat him badly. In fact, he has to pay me legal fees,” Trump told Fox Business’s Trish Regan when asked about the ruling. “I don’t think he has any money, but he and [Stormy Daniels] have to pay me a lot of legal fees.”

Avenatti launched Fight PAC earlier this month to back a potential presidential run and aid fellow Democrats. He has also recently delivered speeches in a number of important presidential primary states, including New Hampshire and Iowa.

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