Judge to Avenatti: Pay the $4.85M you owe former law-firm attorney; Update: Evicted after check bounced?

Enjoying the luxe life? Stiffing creditors and battling the IRS? I’m torn after reading this exposé from the Daily Beast as to whether it paints a picture of presidential-candidate disqualification … or front-runner status. Hey, it worked in 2016 …

That strategy is off to a bad start, though, in an important — and costly, to Michael Avenatti — update today:

That’ll put a dent in the 2020 victory fund, eh? The attorney was supposed to collect $10 million from Eagan Avenatti, the previous law firm run by Stormy Daniels’ attorney. Avenatti agreed to pay Jason Frank an additional $4.85 million on top of that, but Avenatti tried claiming that Frank owed him $12 million for “fraud” related to stealing clients. That argument worked out as well as Avenatti’s lawsuit against Trump on Daniels’ behalf, who now has to pay Trump’s legal fees in the case.

So when can Frank expect payment? That brings us back to TDB’s report on Avenatti’s high-flying and high-stiffing lifestyle.

Civil court filings paint a picture of Avenatti as a hard-charging attorney who enjoyed the luxe life—jetting around the world to race cars with a Saudi prince and treating his wife and their friends to luxury villas in Cabo San Lucas, Mexico. Yet he and his companies owed hundreds of thousands in unpaid taxes and in compensation to one former colleague, who claims Avenatti stiffed him out of millions in law-firm profits.

A review of court documents reveals that Avenatti, his former law firm Eagan Avenatti, and his former company Global Baristas, the majority owner of the Seattle-based Tully’s coffee chain, have owed millions in unpaid federal and state taxes in Washington and California, as well as hundreds of thousands in past-due rent to landlords.

A Newport Beach landlord began eviction proceedings last month against Eagan Avenatti in Orange County Superior Court. The real-estate entity claims Eagan Avenatti failed to make rent for three storage spaces and a 8,371-square-foot suite, totaling more than $107,415 for the months of July and August. (A lawyer representing the Irvine Company, which manages the rentals, declined to comment.)

The bankrupt coffee company is also older news, but the eviction fight with the Irvine Company is more of an eye-opener. Avenatti told TDB’s Kate Briquelet that he divested himself from Eagan Avenatti and operates under Avenatti and Associates. He told the court something else in July, however, declaring that he has “ownership interests in two separate law firms.” Avenatti also argued at the time that he deducted the cost of improvements from lease payments to the Irvine Company and later offered to pay the bills, but but that the Irvine Company refused payment.

What about the taxes? Back in May, news media noted that the IRS had been battling Avenatti’s former law firm over unpaid taxes. This time, however, Briquelet reports that Avenatti’s personal taxes are in dispute:

Tax liens filed in Orange County also show that Avenatti has personally owed at least $1.2 million in federal taxes on top of the corporate debts. One lien, filed in February 2018, was for $308,396, while another filed in August 2015 showed a balance of $903,987. The Daily Beast did not find records showing the liens were released, but Avenatti claims both debts were “fully paid.”

In the days of long ago — meaning 2012 or so — this kind of scandal would derail political ambitions at any level. Harry Reid even bragged about using rumors of tax issues to derail Mitt Romney’s presidential bid in the 2012 cycle. It’s that kind of McCarthyist manipulation that made such allegations less of a problem for political candidates, which is how we ended up with Trump, for better or for worse. No reason to think it wouldn’t benefit Avenatti, too. Assuming he can find a landlord willing to lease him campaign space, that is.

Update: The prospects got even worse for Avenatti this afternoon:

Less than an hour after his defeat in the Los Angeles lawsuit, the firm, Eagan Avenatti, suffered another setback at a trial in Santa Ana: The Irvine Co. won a court order evicting Avenatti and his staff from their suite at the Fashion Island mall for failing to pay the last four months of rent.

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. …

In July, Eagan Avenatti paid the monthly rent of $52,235 but the check bounced, according to the landlord.

He’s already got the deficit spending thing down pat.

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David Strom 5:21 PM on June 02, 2023