Michael Avenatti’s law firm reportedly filed for bankruptcy protection Thursday, weeks after a former partner alleged "financial shenanigans" surrounding the bankruptcy proceedings.
The fresh bankruptcy filing came a day before Avenatti was scheduled to appear in a California federal courtroom to give testimony on the finances of his firm, Eagan Avenatti. A lawyer for Jason Frank, a former partner with the firm who last month charged that millions of dollars in legal fees had been hidden from creditors during the bankruptcy proceedings, planned to question Avenatti about the firm’s finances, the Los Angeles Times reported Friday.
The bankruptcy filing puts a temporary halt on Frank’s case, however -- including Avenatti's previously scheduled testimony Friday.
“Who cares? Old firm that we have not operated under for a very long time,” Avenatti told the Los Angeles Times when asked about the bankruptcy filing. “We want to ensure the proper distribution of assets to creditors — it means nothing to our current law practice. Onward and upward.”
Eric George, an attorney for Frank, told the newspaper the testimony would have “exposed [Avenatti's] financial shenanigans.”
“That Mr. Avenatti would try something so desperate speaks volumes about how bad the evidence is against him,” George said.
Avenatti, who now operates with Avenatti & Associates, has maintained he did nothing wrong.
Frank, who is reportedly trying to collect on a $10 million judgment he won against the firm, has also accused Avenatti of spending extravagantly, including: $13,000 in rent for his Los Angeles apartment; a $3,640 payment on his Ferrari; $150,000 for his coffee company; $53,600 for his ex-wife; and $232,875 for his auto racing team, according to the Los Angeles Times.