A 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 Eagan Avenatti to pay the $10 million to Jason Frank, a lawyer who used to work at the Newport Beach firm.
"At this point, that's what's appropriate," Bauer said at a brief hearing.
To settle his law firm's bankruptcy, Avenatti personally guaranteed in December that it would pay Frank $4.85 million. But he and Eagan Avenatti failed to pay the first $2 million installment that was due last week, triggering Tuesday's judgment.
The firm is also delinquent on $440,291 in back taxes, penalties and interest that Avenatti promised would be paid last week, Assistant U.S. Atty. Najah Shariff told the bankruptcy judge.
Avenatti and his firm had accepted the deadline under an agreement reached with the Internal Revenue Service in January. It requires Eagan Avenatti to pay the IRS a total of $2.4 million.
More than half of that was for payroll taxes that the law firm withheld from employees but did not turn over to the government. Avenatti, who has blamed the lapse on an unnamed payroll company, was personally responsible for holding the money in trust for the IRS, according to the U.S. attorney's office in Los Angeles.
Avenatti paid an initial installment of $1.5 million. Shariff told the judge that the government would soon file a motion demanding payment of the additional money that was due last week...
Bookmarks