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Stormy Daniels’ Crowdfunded Legal Fund May Be Seized in Michael Avenatti Bankruptcy Case

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By Teresa Lo

Posted on June 13, 2018

Summary: There is a chance that Stormy Daniels’ legal fund may be given to a collector who is owed money from Eagan Avenatti LLP.

Stormy Daniels raised $577,000 from the public to help pay for her lawsuits against Donald Trump and his lawyer Michael Cohen, and a bankruptcy lawsuit against her current attorney’s firm threatens to take that cash away.

According to Fox News, Daniels’ outspoken attorney, Michael Avenatti, was forced by a bankruptcy court last month to pay $10 million to Jason Frank, a former lawyer at Avenatti’s firm. Frank said that Eagan Avenatti LLP owed him $4.85 million and stiffed him on the first payment. He asked a bankruptcy judge to allow him access to the legal fees the firm collects from its clients, including Daniels.

Frank is allowed to collect up to $10 million from Eagan Avenatti, but Avenatti told Fox News that Daniels’ money is not up for grabs.

“Eagan Avenatti, LLP has never represented Ms. Clifford,” Avenatti told Fox News in an email. “Eagan Avenatti, LLP has never had any retention agreement with Ms.Clifford…Ms. Clifford never hired Eagan Avenatti, LLP…Eagan Avenatti, LLP is not entitled to any fees from Ms. Clifford…and Eagan Avenatti, LLP has no right to any fees raised from Crowdjustice.com.”

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Daniels, real name Stephanie Clifford, set up a fundraising page on CrowdJustice, and she has raised more than $577,000 from 16,500 people. Avenatti said that Daniels’ is represented by his firm Avenatti and Associates, and he showed Fox News documents as proof.

The Los Angeles Times said that Avanetti and Associates is owned completely by Avenatti.

“In corporate papers filed with California’s secretary of state, Avenatti & Associates, wholly owned by Avenatti, lists its type of business simply as “Eagan Avenatti.” Avenatti & Associates owns 75% of Eagan Avenatti; San Francisco lawyer Michael Eagan owns the rest,” the Los Angeles Times said.

Avenatti is representing Daniels in her defamation cases against Cohen and Trump, who claimed that she was lying about her 2006 affair with our current president. Daniels is also suing Trump and Cohen in order to break the 2016 non-disclosure agreement she had signed in exchange for $130,000.

Cohen is now facing criminal charges because of the payment to Daniels and other business dealings. It is widely speculated that he may flip on Trump in the case being led by Special Counsel Robert Mueller.

Since Avenetti began representing Daniels, he has made numerous television appearances and has gone viral online. Last month, an attorney filed a complaint with the Calfornia State Bar against Avenetti, claiming he was unfit to be a lawyer. The complaint said Avenetti had numerous unpaid liens concerning the now bankrupt coffee chain Tully’s which he co-owned with actor Patrick Dempsey. Avenatti has denied responsibility for the liens.

Avenatti is also involved in a contentious divorce with his estranged wife Lisa Storie-Avenatti who claims the attorney spends $40,000 a month on everything from a private jet to leasing expensive cars.