The United States Law Week

Avenatti Firm Bankruptcy Case Dumped by Judge After Six Days

March 14, 2019, 5:19 PM

The Chapter 11 bankruptcy case celebrity attorney Michael Avenatti filed for his former law firm came to an abrupt end after six days, when a Santa Ana, Calif. bankruptcy judge dismissed the case.

Judge Catherine E. Bauer of the U.S. Bankruptcy Court for the Central District of California ruled March 13 that the case for the Trial Group LLP is dismissed and that Avenatti can’t file another bankruptcy for the firm for at least 180 days.

Bauer also ordered Avenatti to appear and demonstrate why the judge shouldn’t sanction him for filing the case, said Jack Reitman, an attorney at Landau Gottfried & Berger LLP who represents the receiver appointed by another federal judge in February to take over Avenatti’s firm.

Jason Frank, an attorney with Avenatti’s former firm, won a judgment against the firm—called Eagan Avenatti LLP before the name was changed to the Trial Group—and Avenatti for $10 million. Frank filed a motion to dismiss the March 7 bankruptcy Avenatti filed for the Trial Group on the grounds that only the receiver had the authority to file bankruptcy for the law firm.

Frank said that Avenatti filed the latest bankruptcy—Eagan Avenatti was in Chapter 11 in 2017 and 2018—to avoid being forced to appear for an examination before a judge to locate assets to satisfy Frank’s judgment.

The receiver joined in the motion to dismiss the case.

“Avenatti’s bankruptcy petition was just the latest in Mr. Avenatti’s seemingly never-ending effort to avoid honoring his obligations,” Frank’s attorney and current partner Andrew Stolper said.

Avenatti is brushing off the bankruptcy court’s ruling.

“Much ado about nothing—about a debt owed to an employee from an old law firm. The guy wasn’t even an equity partner; he simply carried the title for show. No sanctions will be awarded,” Avenatti said.

When asked if he would now sit for the examination to locate assets, Avenatti said, “Who cares? This is a big nothing burger.”

The case is In re: The Trial Group LLP, Bankr. C.D. Cal., Case Docket 3/7/19.

To contact the reporter on this story: Daniel Gill in Washington at dgill@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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