A judge in California dropped the hammer on Michael Avenatti on Tuesday, hitting his law firm with a $10 million bankruptcy judgment.
The Los Angeles Times reports:
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.
At the hearing, the U.S. Justice Department revealed that Avenatti’s firm has also defaulted on back taxes that it promised to pay the Internal Revenue Service under another bankruptcy settlement.
Under the Jan. 30 bankruptcy settlement, Avenatti personally agreed to pay the IRS $2.4 million in back taxes, penalties and interest, court records show.
Nearly $1.3 million of that was for payroll taxes that his law firm withheld from employees but did not turn over to the government.
At the same hearing, the Justice Department also revealed Avenatti’s firm has defaulted on back taxes that it promised to pay the Internal Revenue Service under another bankruptcy settlement.
Of course, Avenatti shrugged off the ruling and told the LA Times that questions in relation to the ruling are “irrelevant.”
“Sensational reporting at its finest. No judgment against me was issued nor do I owe any taxes,” he said.
He’s in big trouble.
Avenatti represents adult film star Stormy Daniels, whose real name is Stephanie Clifford.
Daniels claims she had an affair with President Donald Trump in 2006, which the president has vehemently denied on numerous occasions. She also claims Trump’s personal lawyer, Michael Cohen, paid her $130,000 in 2016 as part of a nondisclosure agreement.
— David Webb (@davidwebbshow) May 23, 2018
Welcome To @ChrisCuomo @CNN “HALF ASKED” Reporting!
So Busy Asking Every #DNC Trump & @MichaelCohen Bashing Questions, HIDES Stormy Daniels Tax Fraud @MichaelAvenatti Lawyer Owes $10 Million In Taxes & 1.4 Million in Firm! Guess His 15 Minutes Is OVER! #MAGA pic.twitter.com/xcleE7bMjG
— Media Shrink (@MediaShrink) May 23, 2018
Avenatti has been on liberal cable news segments almost nonstop since news of the lawsuit first broke a few months ago, but some major skeletons are starting to come out of his closet.
The U.S. government slapping his California-based law firm with a $10 million bankruptcy judgment is very serious, but it’s just one of many lawsuit he is currently facing that could have a major impact on his law firm and credibility.
This may just be the first of many major revelations about Avenatti’s shady past.
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