Law firm of Stormy Daniel's attorney hit with $10 million judgment

[pnwmom]

Source: LA Times

The law firm of Stormy Daniels' attorney Michael Avenatti was hit with a $10-million judgment Tuesday in U.S. Bankruptcy Court after he broke his promise to pay $2 million to a former colleague.

Judge Catherine Bauer of U.S. Bankruptcy Court in Santa Ana ordered the Eagan Avenatti law firm to pay the $10 million to Jason Frank, a lawyer who used to work at the Newport Beach firm.

Read more: http://www.latimes.com/politics/la-na-pol-avenatti-bankruptcy-20180522-story.html

---

The lawsuit was filed when Avenatti was 2 days late with the $2 million due.

Somehow this judge decided that this penalty was "appropriate."

Here's some background:

https://talkingpointsmemo.com/muckraker/avenatti-sued-breach-of-contract

Stormy Daniels' attorney Michael Avenatti was sued Wednesday for breach of contract by his former law partner Jason Frank.

Frank alleges that Avenatti violated a settlement agreement that had been reached in December. Under the terms of the settlement, according to the complaint, Avenatti's law firm was to pay Frank $4.85 million, with a $2 million installment due by May 14. Avenatti failed to wire the installment, the complaint alleges.

In a statement to TPM, Frank's attorney Eric M. George said that Avenatti's law firm "entered into a crystal clear written settlement agreement to resolve a prior lawsuit brought by Jason Frank, his former law partner."

"The settlement agreement was approved by a federal court and was a condition of his law firm exiting bankruptcy," he said. "Under this settlement, Mr. Avenatti's law firm was required to pay Mr. Frank $4.85 million, all of which was personally guaranteed by Mr. Avenatti."

[snowybirdie]

1. Che k it out

Read on another post this was fake news. I'll look it up too

[pnwmom]

4. The LA Times isn't generally a fake news source. n/t

[FarPoint]

26. I heard Avenatti said it was a different Firm...

Not his Firm

[PoliticAverse]

40. Read this post which explains what happened...

https://www.democraticunderground.com/?com=view_post&forum=1002&pid=10645544

[Ellipsis]

2. "Plan B", heh.

[neohippie]

3. It appears to be a different Avenatti

Daniel's attorney says it's a different firm

Link to tweet

[pnwmom]

5. Maybe it was an old law firm that Avenatti was associated with, and that's why

he can say that it had no ties to the Daniels' case.

But I think it does have a tie to Michael Avenatti.

I'm adding some background the the OP.

https://talkingpointsmemo.com/muckraker/avenatti-sued-breach-of-contract

Stormy Daniels’ attorney Michael Avenatti was sued Wednesday for breach of contract by his former law partner Jason Frank.

Frank alleges that Avenatti violated a settlement agreement that had been reached in December. Under the terms of the settlement, according to the complaint, Avenatti’s law firm was to pay Frank $4.85 million, with a $2 million installment due by May 14. Avenatti failed to wire the installment, the complaint alleges.

[jberryhill]

9. Just to be factual here

His "old firm" is his "old firm" precisely because of this proceeding, which dates back to March 2017.

In the stipulation of settlement of this bankruptcy proceeding his "new firm" and he personally, guaranteed payment.

So, yes, his current firm is on the hook for breach of the settlement, as things currently stand:

You can read the settlement agreement for yourself here:

https://www.courtlistener.com/recap/gov.uscourts.cacb.1788714/gov.uscourts.cacb.1788714.436.2.pdf

Avenatti's tweet is not exactly what I would call "true" since his current firm guaranteed the settlement.

[pnwmom]

11. Is his current firm on the hook or he personally on the hook?

In other words, if he incorporated a new firm would that firm be on the hook for a bankrupt previous firm's debt?

I would think it would just apply to him personally, in that case, and not as Stormy's attorney.

[jberryhill]

14. I posted a link to the settlement agreement

He and his current firm guaranteed the settlement. It's in the link above your question. That's why he and his firm are named as parties and why he signed for himself personally and on behalf of his firm.

I have no idea what you might mean by "as Stormy's attorney".

[pnwmom]

23. I mean, technically couldn't he have incorporated the law firm that, along with him personally,

guaranteed the payment?

And couldn't be represent her OUTSIDE of that incorporated law firm?

[jberryhill]

24. The first question doesn't make any sense

Law firms don't represent clients. Lawyers represent clients. A law firm is a business that is built around the practice of law by lawyers.

I have no idea what you mean by the second question either, or, really, why a distinction would matter.

Every paper filed on behalf of Daniels identifies him as her attorney, and Avenatti & Associates as his firm. So, is this some sort of hypothetical?

It has no relevance to Daniels contract dispute.

[Jazzgirl]

34. Uh.....no.

Please stop.

[onenote]

6. No. It's the same one. Apparently he's claiming that his representation of Daniels

is not being undertaken by the firm that bears his name and in which he is an equity partner. Not saying that isn't possible, but it would be an unusual arrangement for a firm to allow one of its lawyers to handle matters separate and apart from the firm.

I recommend folks read the LA Times article.

I like Avenatti, but sometimes he tries to be too slick for his own good.

[RhodeIslandOne]

16. He's giving a "lawyer's answer"

He kind of wants people to think it has nothing to do with him by simply saying it has nothing to do with the Daniels case, yet he feels the need to comment on the reporting which would be odd for someone who has nothing to do with it.

[jberryhill]

36. As Rachel Maddow once said, "Michael Avenatti was unavoidable for comment"

[RhodeIslandOne]

37. I feel like he's our side's Carter Page

Not dumb but more attention seeking.

[7962]

38. Still involves him, its just not connected to the Daniels case. He's deflecting.

Which is what I expect from him. He's got a lot of shady shit in his background. Hell, even Patrick Dempsey is suing him!! Just saw that today, but its old news apparently.

As I said way back, to fight someone like Trump you need someone like Trump

[SeattleVet]

7. More background from Business Insider

http://www.businessinsider.com/michael-avenatti-law-firm-stormy-daniels-media-coverage-2018-5

[onenote]

8. The firm isn't disputing the $10 million figure.

I don't think an implied slam at the judge is warranted here.

[pnwmom]

10. The total judgement was for $4.85 million, with $2 million due two days

before the lawsuit was filed.

So I think the judge's penalty was excessive.

[onenote]

12. So do you think this part of the LA Times story is made up?

Mark S. Horoupian, an attorney for Avenatti's firm, told the judge that the firm was not disputing Frank's right to a $10-million judgment under the terms of the bankruptcy settlement.

After the hearing, Horoupian declined to comment.

Frank alleges that Avenatti's firm cheated him out of millions of dollars in compensation for his work.

In a settlement of his firm's bankruptcy case, Avenatti personally promised to pay Frank $4.85 million, starting with the $2 million that was due last week.

Avenatti agreed that if he missed the deadlines for turning over the money, he would accept a Bankruptcy Court judgment ordering his law firm to pay Frank $10 million. That includes the $4.85 million that he'd personally guaranteed.

[pnwmom]

22. No. n/t

[onenote]

15. It wasn't a "penalty" -- it was a settlement

The plaintiff started off with a claim of more than $18 million. Ultimately, it was reduced to $10 million and the parties agreed to settle for $4.85 million with the express understanding that the plaintiff would forego any claim for the remaining $5.15 million so long as the defendants met their obligations under the settlement. They didn't. So telling the firm to pony up the full amount is not "excessive" -- it was the deal the parties struck. If you don't believe me, read paragraphs 3.5 and 3.6 of the settlement.

https://www.courtlistener.com/recap/gov.uscourts.cacb.1788714/gov.uscourts.cacb.1788714.436.2.pdf

[bucolic_frolic]

13. I'm thinking

Eagan Avenatti is a different corporate entity from Avenatti & Associates even though the same principal is or was involved with both.

[jberryhill]

17. It. Doesn't. Matter.

Avenatti & Associates is a guarantor of the stipulated settlement:

https://www.courtlistener.com/recap/gov.uscourts.cacb.1788714/gov.uscourts.cacb.1788714.436.2.pdf

[bucolic_frolic]

19. The LA Times article

could be a little more forthcoming on the relationship/ownership of the several entities of Avenatti.

[jberryhill]

20. In what way?

Newspaper reporters are awful at understanding legal stuff. That's why I occasionally comment on legal stuff here, with reference to actual documents you can read for yourself.

[onenote]

18. Eagan Avenatti was the firm involved in the case being described; it declared bankruptcy

But that didn't take Avenatti off the hook for the payments ordered by the court when Avenatti and his old firm failed to live up to their end of the settlement they had reached with the plaintiffs.

Look, as I said, I like the fact that Avenatti is a thorn in Trump's side. But he's as slick and slippery as they come.

[jberryhill]

21. He and his new firm are explicit guarantors of the settlement

So, to the extent he is suggesting it doesn't have anything to do with his new firm, that is misleading.

[onenote]

25. The only guarantor I see in the settlement and in the guranty is Avenatti personally

I don't think the new firm is a guarantor of the amount. But the new firm did agree as part of the settlement not to challenge the entry of a non-appealable judgment of $10 million against the old firm if the settlement payments were not made pursuant to the prescribed schedule. And Avenatti personally was obligated to make those payments "promptly" if they weren't made by his old firm and he remains on the hook for at least $4.85 of the ten million.

[jberryhill]

28. Ah, well there you go

We're at 1 to 1 in the nitpicking sweepstakes. Next we go to the bonus round.

[onenote]

29. :)

[jberryhill]

30. You go first on this one, though...

Procedurally and substantively, there's a lot to unpack with this unusual letter:

https://www.courtlistener.com/recap/gov.uscourts.nysd.491943/gov.uscourts.nysd.491943.58.0.pdf

[onenote]

31. I'm not even going to pretend to know enough to assess that letter

My first reaction is that if Cohen directly or indirectly wants to make public some self-selected recordings or documents that’s his prerogative. Although it could impact future claims of privilege. My second reaction is that Judge Woods May not be amused by this letter.

We shall see. And I can’t believe I’m writing this while heading to a baseball game.

[jberryhill]

35. Enjoy the game

But, yeah. What you said and a bit more.

[jberryhill]

45. Someone finally untangled much of it:

https://www.courtlistener.com/recap/gov.uscourts.nysd.491943/gov.uscourts.nysd.491943.66.3.pdf

[pangaia]

27. The earlier OP explains this.

No need to keep speculating.

[stonecutter357]

32. #facknews !

[Jazzgirl]

33. Bull.

n/t

[7962]

39. Whats bull?

Its all right there. Even if it is written a bit odd.

[Codeine]

44. How so?

The facts are pretty straightforward.

[andytheteacher]

41. This guy is a creep

I think this is the wrong avenue for us. He's a creep, the scandals in his past are real.

Let's not get in bed with a porn star...Trump already did and we're better than him.

Trump is going to be exposed for things 1000x more serious than paying off a porn star. Putting this creep on TV isn't going to help us win the midterms which should be our entire focus.

[Tarc]

43. Interesting talking points you have there

[Maxheader]

42. Allegations are more credable

When the accuser has their s#$t together