Just when you think things couldn’t get any worse for Michael Avenatti, who some of you have dubbed the CPL…..they do.
Going from bad… to worse… to bankruptcy fraud!
I think that’s generally something you want to avoid in life, right?
Remember when this guy was flying high, on all the news channels attacking Trump, attacking Kavanaugh, spewing profanities, representing Stormy Daniels….
Remember all of that?
That wasn’t very long ago.
Now he’s apparently in bankruptcy court and still trying to “hide millions” in what the opposing party in the bankruptcy court has called bankruptcy fraud.
Oh how the mighty have fallen!
Here are more details, from the LA Times:
Michael Avenatti agreed Wednesday to relinquish financial control of his longtime law firm hours after a former partner filed papers accusing him of hiding millions of dollars from the court that oversaw its bankruptcy.
The celebrity lawyer and his firm, Eagan Avenatti, consented to the appointment of a receiver to take possession of its bank accounts, case files, computers and other assets.
Avenatti also promised to cooperate with efforts by Jason Frank, a former lawyer at Eagan Avenatti, to collect on his $10-million judgment against the firm. Avenatti will continue to work as the lead lawyer in his law practice, which he now calls Avenatti & Associates.
The agreement came after Frank asked a federal court Tuesday night to appoint a receiver to seize Eagan Avenatti and stop the firm from draining its assets. U.S. Magistrate Judge Karen E. Scott in Orange County signed an order late Wednesday naming Newport Beach accountant Brian Weiss as the receiver.
Frank’s court papers alleged that Avenatti used nefarious bank maneuvers when his firm was under federal bankruptcy protection to hide millions of dollars from its creditors.
“This includes brazen acts of bankruptcy fraud,” Frank’s lawyer, Scott H. Sims, wrote in the court documents.
Avenatti denied wrongdoing.
“Every dollar has been properly accounted for and reported as required and as previously set forth in numerous accountings,” he said. “This is much to-do about nothing.”
Avenatti, best known for representing porn actress Stormy Daniels, said the bankruptcy court did not require him to receive all of his legal fees through Eagan Avenatti.
“There has never been any misdeeds or fraud — any claim to the contrary is politically motivated, completely bogus and driven by Jason’s own personal demons and vendetta,” he said.
During the year when Eagan Avenatti was under U.S. Bankruptcy Court protection, starting in March 2017, it was required by law to file monthly reports on its income and spending.
Avenatti signed the reports under penalty of perjury as the firm’s managing partner and majority owner.
But the reports did not disclose that Avenatti opened six bank accounts that received millions of dollars in legal fees during the bankruptcy, Frank claimed Tuesday in his court papers.
The monthly reports also divulged nothing about the personal compensation to Avenatti, which would have required permission from the bankruptcy trustee, the documents alleged.
He used some of the money for personal expenses such as $13,000 in rent for his Century City apartment; a $3,640 payment on his Ferrari; $21,000 for Passport 420, an Avenatti company that owns a Honda jet; $150,000 for his troubled coffee company, Global Baristas; $53,600 for his ex-wife, Christine Carlin; and $232,875 for HTP Motorsport, his auto racing team, the records showed.
In a joint court stipulation filed late Wednesday, Frank agreed to withdraw the court papers alleging bankruptcy fraud, and Avenatti and his firm accepted the receivership.
Frank, who was a nonequity partner at Eagan Avenatti, won the $10-million judgment after the bankruptcy case was dismissed last March. He’d accused the firm of cheating him out of more than $15 million in pay he was due under his employment contract.
Last month, Frank asked U.S. District Judge Virginia A. Phillips to hold Avenatti and the firm in contempt of court for defying a subpoena for financial records. Frank urged the judge to jail Avenatti to compel compliance. Phillips has not yet scheduled a hearing on the request.Through subpoenas to banks, Frank obtained records that detail millions of dollars in legal fees, settlement payments and other funds that Avenatti collected during the bankruptcy but did not disclose to the trustee, his Tuesday court filing showed.
In one case, Eagan Avenatti was representing ticket holders who sued the NFL over seating snafus at the 2011 Super Bowl in Arlington, Texas. After the NFL case settled, a Texas lawyer told Avenatti in a May 2017 email that he was ready to transfer $1.4 million to Eagan Avenatti, the court records show.
Avenatti responded with wiring instructions that split the money. He directed $409,000 to a firm account that was disclosed to the bankruptcy trustee and the remaining $953,000 to an undisclosed account that he controlled.