A U.S. Bankruptcy Court judge on Tuesday ordered the law firm of Stormy Daniels' attorney, Michael Avenatti, to pay $10 million after failing to pay a former colleague $2 million that he was owed.
Judge Catherine Bauer ruled against the Eagan Avenatti law firm after Avenatti broke a promise to pay lawyer Jason Frank $2 million, the Los Angeles Times reports. Avenatti, whose public profile has risen since taking Stormy Daniels' case against President Donald Trump, had pledged to pay Frank $2 million, but the deadline passed without him or his firm giving Frank the money.
"At this point, that's what's appropriate," Bauer said at a hearing.
In addition, Avenatti's firm has defaulted on back taxes that it must pay from another bankruptcy hearing, something the Justice Department revealed at Tuesday's hearing. Assistant U.S. Attorney Najah Shariff said the federal government will file a motion demanding the back taxes be paid.
Avenatti attacked the Times reporter who wrote the article, Michael Finnegan, saying his story is "Irrelevant. Over blown. Sensational reporting at its finest."
Nonsense. Completely different law firm - no ties to Daniels case. Irrelevant. Over blown. Sensational reporting at its finest. Check the facts next time please and report accurately.
— Michael Avenatti (@MichaelAvenatti) May 22, 2018
Finnegan had not said the bankruptcy or back taxes had anything to do with Daniels, who is suing Trump. This is far from the first time Avenatti has attacked reporters for unfavorable coverage, as he has targeted writers at the Daily Caller and the Hollywood Reporter over unfavorable coverage.
Eagan Avenatti's financial problems are extensive, according to the Times.
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.
Avenatti has paid $1.5 million of what was due, but missed the deadline last week for paying the next installment of $440,291, according to the U.S. attorney's office in Los Angeles.
Avenatti, who has blamed the unpaid taxes on an unnamed payroll company, accused the Times of "purposely confusing me with a separate legal entity that has no role in the Daniels case."
Avenatti said the judgment against the law firm does not amount to a judgment "against me."
"No judgment against me was issued nor do I owe any taxes," he told the Times.
Court records show that Avenatti is the lead equity partner in Eagan Avenatti.
Avenatti has spent a great deal of his time recently on the Stormy Daniels case, which, as he pointed out, is unrelated. A Washington Free Beacon analysis found that, as of May 11, he had earned nearly $175 million in free media during his appearances on MSNBC and CNN over the previous two months.
The firm is also not disputing Frank's right to the $10 million that the judge ordered, according to one of its attorneys, Mark S. Horoupian. He did not comment further after the hearing.