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Stormy Daniels' lawyer Michael Avenatti's firm hit with $10 million judgment in bankruptcy court

  • Eagan Avenatti, a law firm of attorney Michael Avenatti, was hit with a $10 million judgment in bankruptcy court Tuesday, the Los Angeles Times reports.
  • A Justice Department lawyer said Eagan Avenatti had also defaulted on back taxes that it had agreed to pay in connection with another bankruptcy proceeding, according to the Times.
  • Avenatti told CNBC the Times' report is "nonsense."
Attorney for Stormy Daniels, Michael Avenatti walks outside after US President Donald Trump's personal lawyer Michael Cohen left the US Courthouse in New York on April 26, 2018.
Hector Retamal | AFP | Getty Images
Attorney for Stormy Daniels, Michael Avenatti walks outside after US President Donald Trump's personal lawyer Michael Cohen left the US Courthouse in New York on April 26, 2018.

A firm led by Michael Avenatti, the lawyer for porn star Stormy Daniels in her suit against President Donald Trump, was hit Tuesday with a $10 million judgment by a U.S. bankruptcy court judge, the Los Angeles Times reported.

The firm, Eagan Avenatti, was ordered to pay $10 million to Jason Frank, a lawyer who used to work there, the Times reported.

Eagan Avenatti and Frank had previously agreed that the $10 million would be waived if Frank was paid a total of $4.85 million, according to court records.

But Frank asked for the full $10 million after failing to receive an initial $2 million installment toward the agreed amount when it was due May 14, according to records.

In a statement to CNBC, Avenatti said the Times' account of the case "nonsense."

"Completely different law firm - no ties to Daniels case. Irrelevant," Avenatti said in an email.

Avenatti is representing Daniels in multiple lawsuits against the president, but Eagan Avenatti is not involved in those cases. He is using Avenatti & Associates, APC for Daniels' legal matters.

Brown George Ross, the firm that represents Frank, said in a prepared statement, ''Last week, Mr. Avenatti described our client's claims as "fraudulent and bogus." Today, a federal judge issued a $10 million judgment in our client's favor. That should tell you all you need to know about who is telling the truth.''

During Tuesday's hearing, a Justice Department lawyer said Eagan Avenatti had also defaulted on back taxes that it had agreed to pay in connection with another bankruptcy proceeding, according to the LA Times.

In that case, which was settled Jan. 30, Avenatti agreed to pay the government $2.4 million, the Times reported. At least $1.5 million of that amount has been paid, but Avenatti missed an installment last week, the judge reportedly told the court Tuesday.

Read the full report from the Los Angeles Times.