Not only was Avenatti hit with a multi-million dollar personal judgement concerning an unpaid debt to Jason Frank, but his former law firm, Eagan Avenatti, was evicted from its Newport Beach offices for nonpayment of four month’s rent.
The settlement dispute involved a contract that apparently, Avenatti didn’t honor.
Frank claimed that when he worked with Eagan Avenatti, he had an independent contractor’s agreement, which stated that he would earn 25 percent of the firm’s annual profits, and 20 percent of his own client’s fees.
Frank said that he was supposed to be provided with copies of the annual income tax forms and other financial records, as part of the agreement.
He filed his lawsuit in May, 2018, alleging that Avenatti’s firm would not disclose the records, as the contract outlined. He also claimed they misquoted the exact amount of the profits, and did not pay him what was due.
He had filed a demand for arbitration in February, 2016, and left the firm a few months afterward.
The twin blows came as Avenatti was heading to New Hampshire for his third visit to the state that kicks off the 2020 presidential primaries. He is exploring a run for the Democratic nomination, and his troubled financial history could emerge as a significant campaign issue if he joins the race.
Eagan Avenatti emerged from federal bankruptcy protection in March after making promises to pay millions of dollars to Frank and other creditors, including the Internal Revenue Service.
Frank has also won a $10-million judgment against the firm.
‘My client has had an awful lot of money owed to him for a lengthy period of time,’ Frank’s attorney Eric George said, ‘and it has been delayed through one tactic or another. Today finally the right thing happened.’
[Avenatti] recently told a U.S. Bankruptcy Court judge that his other firm, Avenatti & Associates, wholly owned by Avenatti, had acquired 100% of the equity in Eagan Avenatti.
But Avenatti told The Times on Monday that he hadn’t owned Eagan Avenatti for months. He did not name the new owner.
‘Any judgment issued against me will be deducted from the over $12 million that Jason Frank owes me and my law firm Avenatti & Associates as a result of his fraud,’ Avenatti said by email.
However, no court has found that Frank engaged in fraud, and Avenatti is not pursuing any court case alleging that he did.
At the time the lawsuit was filed, Avenatti told Law&Crime that it was “Frivolous and baseless.”
Apparently, the judge did not agree.
Avenatti has connections to leading democrats, and has been in the news recently, not for his lack of payment, but for espousing the unsubstantiated claims of a woman he represented, who accused Justice Brett Kavanaugh of improper sexual behavior as a teen. His other famous client is Stormy Daniels, who has made allegations against the President.
LA Times reported, “In the Santa Ana trial, 520 Newport Center Drive LLC, an arm of the Irvine Co., alleges Eagan Avenatti missed $213,254 in rent payments over the last four months for its ocean-view suite on the 14th floor of an office building at Fashion Island.
Nobody from Eagan Avenatti showed up for the trial.
In court papers, the firm claimed it deducted the cost of needed repairs from its rent payments but did not receive proper credit.
The landlord denied that the offices needed any serious repairs. And the lease, signed by Avenatti, says the tenant “understands that it shall not make repairs at landlord’s expense or by rental offset.”
In July, Eagan Avenatti paid the monthly rent of $52,235 but the check bounced, according to the landlord.
When it rains, it pours, they say.
If Avenatti was planning to enter politics, the mud that has stuck to him from these recent losses wouldn’t seem like a good way to enter into voters’ good graces… but maybe he figures that if other weasels have done it, why not him?