Lawyers for Avenatti, former partner accuse each other of wasting time

SANTA ANA -- Attorneys representing Michael Avenatti's former firm, Eagan Avenatti LLP, and his former partner, Jason Frank, accused each other of delaying tactics in a bankruptcy court hearing Monday.

The two legal teams are disputing the enforcement of a $10 million judgment against Eagan Avenatti issued in May. Frank claimed Eagan Avenatti bilked him out of $14 million in compensation owed under his 2013 contractor agreement with the firm.

The $10 million judgment is the result of the firm missing payments on a $4.85 million settlement agreement that allowed it to exit bankruptcy. In re: Eagan Avenatti LLP, 17-BK11961 (C.D. Cal., filed Jan. 30, 2018).

The case is no longer active in bankruptcy court, having been transferred to U.S. District Court for judgment enforcement. It is assigned to U.S. Magistrate Judge Karen E. Scott. However, Avenatti has raised jurisdictional disputes in that matter, leaving it up in the air.

None of the appearing parties in U.S. Bankruptcy Judge Catherine E. Bauer's court in Santa Ana appeared happy to be there again, almost exactly four months after her judgment was issued.

"I'm having trouble figuring out why a federal judgment can't be enforced by a federal court. They do it all the time," Bauer said.

Frank's attorney, Sara L. Chenetz of Perkins Coie LLP, called the jurisdiction issue a "delaying tactic" and pointed to Avenatti's providing of his expense reports to the IRS and not Frank as a further example of intractable behavior.

"This shouldn't be necessary," she told Bauer.

Hamid R. Rafatjoo, who represents Eagan Avenatti LLP in bankruptcy court but not district court, said, "The issue of jurisdiction is not a delaying tactic ... They can go brief that issue in district court. Frankly, it's not my problem."

When Bauer asked Rafatjoo who represents the firm in district court, he replied, "not me."

Frank asked that the matter be continued in bankruptcy court rather than disposed of for fear of potential legal shenanigans by Avenatti. Frank indicated he worried Avenatti would argue Bauer's orders were not in effect while the case hung in limbo, dismissed by her court but pending and under jurisdictional dispute with district court.

"It's an educated concern with my history with Mr. Avenatti," Frank told Bauer.

Bauer previously ordered that Eagan Avenatti not spend any money or fees recouped from 54 cases until the judgment is paid in full.

Frank and Chenetz declined to comment after the hearing, and Avenatti, who was handling a hearing for a client in federal court in Los Angeles, did not respond to a request for comment.

In the end, Bauer continued the case until the day of the parties' next hearing with U.S. Magistrate Judge Scott and set the next court time for immediately after their upcoming appearance before Scott.

Assistant U.S. Attorney Najah J. Shariff appeared on behalf of the IRS, another creditor of Eagan Avenatti, and committees of creditors were represented by phone.

Avenatti rose to fame for his representation of porn film actress Stephanie Clifford, better known by her stage name, Stormy Daniels. She is suing Michael Cohen, a former personal attorney to President Donald J. Trump, in an effort to escape a contract she says pertained to hush money paid to her concerning an alleged affair with Trump.