Donations for Stormy Daniels may be seized
Her attorney’s firm owes $10 million in a bankruptcy judgment.
An Orange County lawyer has asked a bankruptcy judge to seize much of the $577,000 donated to porn star Stormy Daniels to pay legal bills in her suit against President Trump.
The lawyer, Jason Frank, is trying to collect on a $10million judgment he won last month against Eagan Avenatti, the Newport Beach firm of Daniels’ attorney, Michael Avenatti.
The firm’s debt to Frank was among the biggest it promised to pay when it emerged early this year from Chapter 11 bankruptcy protection. Frank, who worked at Eagan Avenatti from 2009 to 2016, says the firm cheated him out of millions of dollars in pay.
He won the judgment after the firm broke Avenatti’s guarantee that it would pay Frank $4.85 million.
In papers filed Monday in U.S. Bankruptcy Court in Santa Ana, Frank asked Judge Catherine Bauer to order Eagan Avenatti to give him legal fees, up to $10 million, that the firm might collect from clients in 54 cases.
One of them is the lawsuit filed by Daniels to void the nondisclosure agreement that bars her from talking publicly about what she says was a 2006 sexual encounter with Trump at a Lake Tahoe resort. She received $130,000 to keep quiet.
Daniels set up an online crowdfunding collection in March to cover her legal bills, security costs and any damages she might be ordered to pay Trump for breaching the confidentiality pact.
By Tuesday, more than 16,500 people had donated just over $577,000, according to the CrowdJustice website that oversees the fund.
Frank, who declined to comment, asked the bankruptcy court for a restraining order to keep Eagan Avenatti from diverting potential legal fees away from the firm to dodge the $10-million judgment.
Avenatti, the firm’s managing partner, dismissed Frank’s request as baseless.
Under no circumstances could the court order money donated to Daniels to be turned over to Frank, Avenatti said via email Tuesday. Eagan Avenatti does not represent Daniels and has no right to the crowdfund money, he said.
In correspondence with Trump’s lawyers, however, Avenatti has identified himself as an attorney at Eagan Avenatti in the signature line, used an Eagan Avenatti email address and copied Eagan Avenatti office manager Judy Regnier, court records show.
Eagan Avenatti lawyer Ahmed Ibrahim has done the same in his emails with Trump attorneys.
“A signature block means nothing,” Avenatti said by email, “and you have no evidence the firm ever represented Ms. Clifford.”
Avenatti has said that Daniels, whose real name is Stephanie Clifford, is represented by a “completely different law firm,” Avenatti & Associates.
In corporate papers filed with California’s secretary of state, Avenatti & Associates, wholly owned by Avenatti, lists its type of business as “Eagan Avenatti.” Avenatti & Associates owns 75% of Eagan Avenatti; San Francisco lawyer Michael Eagan owns the rest.
Last week, the bankruptcy court clerk directed the U.S. Marshals Service to enforce Frank’s judgment, a move that could soon lead to seizure of Eagan Avenatti’s assets.