Avenatti facing hearing today on fraud claims

[jberryhill]

Avenatti's ex-partner, Jason Frank, has been trying to collect on the $10M judgment against Avenatti arising from Avenatti's previous failure to pay a $6.5M settlement of debts from the Eagan Avenatti practice. Avenatti's sycophants and Kool-Aid drinkers will tell you "that's his old firm and is not relevant to anything". They are, of course, wrong. Eagan Avenatti remains the firm that brought the Kimberly-Clarke claim which received a judgement of $454M that Avenatti likes to brag about, but which was reduced to $20M and remains on appeal. Still, that $20M might come in some day.

The primary case is In re Eagan Avenatti 8:18-cv-01644 in the Central District of California
<https://www.courtlistener.com/docket/7901826/in-re-eagan-avenatti-llp/>

In that litigation, Frank obtained bank records showing that Avenatti was using his IOLTA as a personal slush fund from which Avenatti (a) concealed receipt of a settlement on behalf of a client that he didn't pay, (b) issued tens of thousands of dollars of payments to his girlfriend Marelli Minuitti, with whom he eventually had a dramatic break-up, and (c) received money from his "The Fight" PAC, about which the FEC has sent him a letter demanding an explanation.

With the roof caving in on him, and an impending 8 March debtor examination hearing over his financial shell games, Avenatti agreed in February to a restraining order against taking any further action in relation to Eagan Avenatti's finances, and appointment of a receiver over the assets of Eagan Avenatti:

Feb 13, 2019
Joint STIPULATION for Order Re Appointment of Receiver and Restraining Order filed by Creditor Jason Frank Law, PLC. (Attachments: # 1 Proposed Order)(Sims, Scott) (Entered: 02/13/2019)
<https://www.courtlistener.com/recap/gov.uscourts.cacd.722683/gov.uscourts.cacd.722683.52.0_3.pdf>

So, it appeared that the dispute was on a glide path to being finally resolved.

Then, on 7 March, Avenatti filed a bankruptcy proceeding:

The Trial Group LLP dba Eagan Avenatti 8:19-bk-10822 <>

As one might imagine, there has been a flurry of interesting filings in that proceeding, a hearing for which is set for today.

03/08/2019
(31 pgs) Emergency motion to Dismiss Case or in the alternative Relief from Automatic Stay Filed by Creditor Jason Frank Law, PLC (Frank, Jason) (Entered: 03/08/2019)

03/08/2019
(3 pgs) Motion to Continue Hearing On (related documents 11 Emergency motion) Request for Standard Hearing and Briefing Schedule Filed by Debtor The Trial Group LLP (Avenatti, Michael) (Entered: 03/08/2019)

03/08/2019
(6 pgs) Application shortening time on Judgment Creditor Jason Frank Law, PLC's Emergency Motion to Dismiss Filed by Creditor Jason Frank Law, PLC (Frank, Jason) (Entered: 03/08/2019)

03/08/2019
(10 pgs) Notice of lodgment of Proposed Order Granting/Denying Application and Setting Hearing on Shortened Notice Filed by Creditor Jason Frank Law, PLC (RE: related document(s)19 Application shortening time on Judgment Creditor Jason Frank Law, PLC's Emergency Motion to Dismiss Filed by Creditor Jason Frank Law, PLC). (Frank, Jason) (Entered: 03/08/2019)

03/11/2019 Hearing Set (RE: related document(s)11 Emergency motion filed by Creditor Jason Frank Law, PLC) The Hearing date is set for 3/13/2019 at 01:30 PM at Crtrm 5D, 411 W Fourth St., Santa Ana, CA 92701. The case judge is Catherine E. Bauer (Le, James) (Entered: 03/11/2019)

03/11/2019
(24 pgs) Supplemental Receiver's Joinder to Judgment Creditor Jason Frank Law, PLC's Emergency Motion to Dismiss Case or in the Alternative Relief from the Automatic Stay; Declaration of Brian Weiss [Related Document #11] Filed by Interested Party Brian Weiss. (Reitman, Jack) Modified on 3/11/2019 (Le, James). (Entered: 03/11/2019)




The Receiver's brief has a readable chronology of events, if the above is unclear, and some real gems:

<https://www.courtlistener.com/recap/gov.uscourts.cacb.1855981/gov.uscourts.cacb.1855981.28.0_3.pdf>


Despite the Order divesting Avenatti of any authority to file a bankruptcy petition on behalf of EA, Avenatti filed the above referenced petition purporting to place EA into Chapter 11 bankruptcy and initiating this case. This is despite the fact that Avenatti was explicitly reminded by the Receiver that Avenatti lacked the authority to do so. Early in the morning on March 8, 2019, JFL, EA’s largest creditor filed its Emergency Motion to Dismiss. The Receiver joins in that motion for the following reasons.

First, Avenatti had no authority to place EA into bankruptcy due to the Receivership Order Mr. Weiss is the only person who has that authority, and explicitly warned Avenatti that he may not do so. Declaration of Brian Weiss (“Weiss Dec.”), ¶¶ 2-5, Exs.1, 2. Therefore, this bankruptcy was unauthorized by the single person who could authorize it.

Second, this bankruptcy was clearly filed in bad faith. As soon as Avenetti placed EA into bankruptcy, he notified the Receiver and counsel for JFL that (i) he would not be appearing for the judgment debtor examination (to which he had stipulated) and (ii) no bench warrant would be effective against him because “The court is divested of jurisdiction. It lacks authority to do anything BY LAW!” See Emergency Motion to Dismiss, Ex. D; Debtor’s Request for Standard Hearing and Briefing Schedule, Docket No. 14, 3:13-16. As discussed in the Emergency Motion to Dismiss, Avenatti is dead wrong. The Ninth Circuit’s opinion in Oil & Gas Co. v. Duryee, 9 F.3d 771, 772-73 (9th Cir. 1993) states that a bankruptcy filed by a company’s former president while that company has a “state appointed rehabilitator [receiver]” is “null and void” and will be dismissed.


If Stormy Daniels' new lawyer wants to find out what Avenatti did with all the money he raised on her behalf, then he'd better get in line quick!

[Thomas Hurt]

1. Avenatti is shaping up to be a good candidate for the Trump cabinet.

[imanamerican63]

2. All that aspiration and he forgot one thing!

His clients' well being! Pathetic that he is like most of all dirty lawyers!

[True Dough]

3. So, if I'm reading this right,

you're expecting a Frank decision?

[jberryhill]

4. Update

His ex-landlord joined in the fun, since Avenatti didn't bother to show up for the motion hearing on attorney's fees in the case which led to Avenatti being evicted from his former office.

The ex-landlord was awarded some $90,000, and would like to be able to collect that judgment:

https://www.courtlistener.com/recap/gov.uscourts.cacb.1855981/gov.uscourts.cacb.1855981.29.2.pdf