The law firm of adult film star Stormy Daniels' attorney, Michael Avenatti, was hit with a $10-million judgment yesterday in bankruptcy court after he broke his promise to pay $2 million to a former colleague, the Los Angeles Times reported. Bankruptcy Judge Catherine Bauer ordered the Eagan Avenatti law firm to pay the $10 million to Jason Frank, a lawyer who used to work at the Newport Beach firm. To settle his law firm's bankruptcy, Avenatti had personally guaranteed that the $2 million would be paid to Frank last week, but both he and his firm failed to turn over the money. At the hearing, the U.S. Justice Department revealed that Avenatti has also defaulted on just over $440,000 in back taxes, penalties and interest that he had personally promised to pay the Internal Revenue Service under another bankruptcy settlement for his law firm. Assistant U.S. Atty. Najah Shariff told the judge that the federal government would soon file a motion demanding payment. Under the Jan. 30 bankruptcy settlement, Avenatti personally agreed to pay the IRS $2.4 million in back taxes, penalties and interest, court records show.
