11:47, October 24 55 0 abajournal.com

2018-10-24 11:47:05
Judge orders Michael Avenatti to pay $4.85M to former lawyer at his law firm

A Los Angeles judge has ordered lawyer Michael Avenatti to pay $4.85 million to a former contract lawyer at his now-defunct law firm, Eagan Avenatti.

Avenatti was accused of breaching a personal guarantee to pay the money to the contract lawyer, Jason Frank. Judge Dennis Landin ruled from the bench on Monday, report the Los Angeles Times, Courthouse News Service, the Recorder, the Associated Press and the Daily Beast.

Frank has alleged that Eagan Avenatti owed him the money under a contract that required the firm to pay him 25 percent of its annual profits, along with 20 percent of fees that his clients paid, court documents say, according to the AP story.

Avenatti guaranteed the $4.85 million payout as part of a settlement agreement. In separate litigation in bankruptcy court, U.S. Bankruptcy Judge Catherine Bauer ruled in May that Eagan Avenatti missed a deadline to make a $2 million payment required under the settlement and ordered the law firm to pay the full $10 million that Frank had sought.

Avenatti is said to be weighing a run for president on the Democratic ticket. He represents adult film actress Stormy Daniels in a suit to invalidate an agreement to keep quiet about an alleged affair in 2006 with President Donald Trump. He also represented her in a suit alleging the president defamed her in a tweet. A federal judge tossed the defamation suit last week.

Avenatti told publications covering Landin’s ruling that any judgment against him should be deducted from $12 million that Frank owes him and his firm for alleged fraud. Avenatti has claimed in the bankruptcy proceedings that Frank and two other lawyers stole his firm’s clients, according to Courthouse News Service. Frank and the lawyers took some clients with them when they left Avenatti’s firm and formed their own firm, the Los Angeles Times reported.

But no court has found that Frank engaged in fraud, and Avenatti hasn’t filed any court case alleging fraud, according to the Los Angeles Times.