A U.S. Bankruptcy Court judge on Tuesday ordered Michael Avenatti’s law firm to pay a former colleague $10 million.
The initial dispute stemmed after Jason Frank, who used to work at the Eagan Avenatti law firm, was personally promised by Avenatti to settle the $2 million by May 14. That money was never paid, the court found.
Frank had repeatedly requested payment from Avenatti but never received a response, according to an affidavit filed in court and which The Daily Caller News Foundation obtained.
“Michael Avenatti, in his individual capacity, agreed to personally guarantee the Settlement Payments in the event of default and entered into a Guaranty Agreement to that effect,” the document reads.
Other information was disclosed at the hearing about the financial struggles of Avenatti’s law firm. The Department of Justice alleged that Eagan Avenatti LLC had defaulted on back taxes and that the government is proceeding with efforts to demand that money.
Avenatti has gone through a number of byzantine agreements in the last year pursuant to the bankruptcy of his law firm, of which he is the lead equity partner.
According to the government, Avenatti had withheld $1.3 million from employees for payroll taxes, but never gave those funds to the government. In a settlement, that number was increased to $2.4 million because of penalties and interest.
When asked to explain the tardy payments by The Los Angeles Times, Avenatti placed the blame on a nameless payroll company and said the coverage of the case was “Sensational reporting at its finest,” and that “No judgment against me was issued nor do I owe any taxes.”
Avenatti is currently facing a number of legal challenges. TheDCNF discovered Wednesday that his coffee companies Global Baristas LLC and Global baristas US, LLC, had yet to pay a woman who won a sex-discrimination case any of the $120,000 that a Seattle judge ordered.
Forty-five other vendors and creditors have also currently filed lawsuits against Avenatti’s company.
“I have no idea. I had nothing to do with that case,” Avenatti told TheDCNF when asked about the litigation.