Lawyer Michael Avenatti decided to give up financial control of his law firm after his former partner accused him of hiding millions of dollar in order “to avoid having to pay a $10 million judgement.” From Fox News:

Jason Frank, a former partner at Eagan Avenatti, accused Avenatti in a court filing of spending extravagantly: $13,000 in rent for his Los Angeles apartment; a $3,640 payment on his Ferrari; $150,000 for his coffee company; $53,600 on his ex-wife; and $232,875 for his auto racing team, The Los Angeles Times reported.

Frank also claimed that Avenatti hid millions in legal fees from creditors during bankruptcy proceedings and asked the court to appoint a receiver to take possession of the firm’s bank accounts, computers and other assets.

Frank’s lawyer stated that Avenatti’s acts “include brazen acts of bankruptcy fraud.” Avenatti retorted back that “[E]very dollar has been properly accounted for and reported as required and as previously set forth in numerous accounting.”

Avenatti described the lawsuit as “much-ado about nothing.” However, The Los Angeles Times reports differently:

During the year when Eagan Avenatti was under U.S. Bankruptcy Court protection, starting in March 2017, it was required by law to file monthly reports on its income and spending.

Avenatti signed the reports under penalty of perjury as the firm’s managing partner and majority owner.

But the reports did not disclose that Avenatti opened six bank accounts that received millions of dollars in legal fees during the bankruptcy, Frank claimed Tuesday in his court papers.

The monthly reports also divulged nothing about the personal compensation to Avenatti, which would have required permission from the bankruptcy trustee, the documents alleged.

He used some of the money for personal expenses such as $13,000 in rent for his Century City apartment; a $3,640 payment on his Ferrari; $21,000 for Passport 420, an Avenatti company that owns a Honda jet; $150,000 for his troubled coffee company, Global Baristas; $53,600 for his ex-wife, Christine Carlin; and $232,875 for HTP Motorsport, his auto racing team, the records showed.

Avenatti will remain lead lawyer at his new firm Avenatti & Associates.

Just a few weeks ago, Avenatti received news that the Los Angeles City Attorney’s office chose not to file domestic charges against him after Estonian actress Mareli Miniutti claimed he dragged her around her apartment. The office left the door open to possibly file charges in the future.

 
 
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