Avenatti Slapped With $5M Verdict in Devastating Lawsuit
Avenatti's former partner Jason Frank sued the lawyer famously representing Stormy Daniels for failing to make good on a previous settlement. The judge agreed – ordering the aspiring presidential contender to pony up $4.85 million to Frank.
Per Law & Crime:
Breaking: Michael Avenatti hit by CA judge with $4.85 million personal judgment for unpaid debt to ex-colleague Jason Frank. His firm Eagan Avenatti facing possible eviction in trial today in OC.— Michael Finnegan (@finneganLAT) October 22, 2018
Frank claimed that when he worked with Avenatti’s former firm Eagan Avenatti, he had an independent contractor arrangement that said he would receive 25% of the firm’s annual profits and 20% of his client’s fees. Frank said he was also supposed to get copies of the firm’s tax returns and other financial records. His lawsuit, filed in May of this year, alleged that the firm didn’t provide the records, misstated what their profits were, and didn’t pay him the amount due to him. In February 2016 he filed a demand to go to arbitration, and resigned from the firm months later.
The case hit a snag a month after the arbitration filing, days before Avenatti was to sit for a deposition, the lawsuit said. A person using the name “Gerald Tobin filed an involuntary bankruptcy petition against Eagan Avenatti, and the firm said this prevented any deposition or trial from taking place. According to Frank’s lawsuit, a judge said that the bankruptcy “has a stench of impropriety,” and gave the firm days to consent to the bankruptcy, which they did.
In December 2017, the two sides reached a settlement agreement, whereby the firm would pay Frank $4.85 million, and in March 2018 the bankruptcy was dismissed. Frank sued when he did not receive any payment by the deadline set in the agreement.
At the time the lawsuit was filed, Avenatti told Law&Crime that it was “Frivolous and baseless.”
The court did not agree. Worse still, the law firm with Avenatti's namesake finds itself without a home, as the building's landlord won a concurrent judgment at trial in Orange County, California.