Stormy Daniels’ attorney Michael Avenatti is a bit of an enigma. A lawyer who has won more than $1 billion in judgments for his clients, Avenatti is a class action contingency fee plaintiffs’ lawyer, so massive wins for a client mean a big payday for him. Typically, contingency fees are one-third of a judgment not including associated court fees but can range as high as 50 percent, plus costs.
A race car driver with expensive taste and a high-end lifestyle, Avenatti has been estimated to be worth about $20 million, according The Squander. But with an unusual bankruptcy case with just one elusive creditor, a huge tax lien and a curious business deal with former partner Patrick Dempsey, yes that Patrick Dempsey aka McDreamy, it’s as clear as a San Francisco fog what Avenatti is actually worth.
Heavy has obtained Avenatti’s divorce court documents that show just how lavish his lifestyle is, though a list of assets has yet to be filed, or at least publicly obtainable as of the publication of this post.
According to Orange County, California court documents, Avenatti filed for divorce from his wife, Lisa-Storie Avenatti, in December 2017, after she kicked him out of their house, and changed the locks, he said in the court documents.
The superior court documents show that the couple, married since 2011, have a 3-year-old son Avenatti wants joint custody of. In the divorce papers, it’s noted that Avenatti’s monthly expenses run about $40,000 and his wife’s about $25,000. His include payments on a Ferrari Spyder and a Mercedes G Wagon, a private plane and pilot, and car racing, the latter two costs are not listed. For his wife, monthly expenses include tens of thousands of dollars for restaurants, shopping, entertainment, gifts, housekeepers, laundry and $12,000 for nannies for the couple’s young son. And they both spend several thousand dollars a month at MedSpa. The monthly payment for their Via Lido Nord, Newport Beach, home is $100,000 and a Los Angeles apartment is $14,000.
Lisa Storie-Avenatti said she has a luxury clothing business, Ikaria Resort Wear, that’s losing money. The Twitter account for the business, with just 18 followers, describes the line as “Elegant Sexy Resort Wear. Ikaria cover-ups are created with 100 percent imported silk, made with crystals from Swarovski and finished by hand.” Court documents state the business is losing money but it did show at New York Fashion Week or at least this tweet indicated it did.
So, Avenatti could be worth at least $20 million, but with $5 million-plus in tax liens and a ubiquitous and unusual bankruptcy, he may owe money. But it’s not clear. Even copious court records don’t tell the whole story.
Here’s what you need to know about Avenatti and his money:
1. Avenatti Has Won $1 Billion in Judgments for Clients in High Profile Cases
Perhaps the biggest win for Avenatti was the $454 million 2017 fraud verdict against Kimberly-Clark’s company Halyard Health. The very high-profile case was brought against the manufacturer of shoddy and faulty protective garments and gear worn by healthcare workers during the Ebola crisis. The case got national attention following an Anderson Cooper story for CBS’ “60 Minutes.”
Cooper is also the interviewer for the Sunday, March 25, “60 Minutes” Stormy Daniels interview.
In the Kimberly Clark case, Avenatti’s law office is a contingency firm, and doing the math, assuming the low-end of the contingency fee spectrum, 33 percent, the payday on that case for Avenatti’s firm may have been $151 million.
Avenatti’s website says that during his career he’s been responsible as lead counsel for over $1 billion in verdicts and settlements, including a number in excess of $10,000,000.
And Avenatti has a number of high-profile cases fought and won, including celebrity clients.
Avenatti worked with Daniel Petrocelli, who previously represented the Goldman family in its case against O.J. Simpson, on multiple legal matters, including the representation of singer Christina Aguilera and litigation surrounding the movie “K-19: The Widowmaker.” He worked defending the Eagles’ Don Henley and Glen Frey in a well-publicized suit brought by former bandmate Don Felder. Avenatti won a $10 million defamation case against Paris Hilton and a large corporate multi-national embezzlement case involving in excess of $42,000,000, according to his website.
And then there’s the 2004 case ultimately settled in 2006, where Avenatti sued ‘The Apprentice’ producer Mark Burnett and its star, Donald Trump.
The settlement amount was undisclosed. Court documents are limited in that most are sealed save one or two that shed some light on the case, but not the dollar amounts involved. Avenatti said his client, Velocity Entertainment Group, had its ideas for the reality show stolen.
And in 2015, he won a jury trial against the National Football League where he compelled Dallas Cowboys’ owner Jerry Jones to testify.
But, Avenatti’s representation of Jim Carrey’s former girlfriend’s family in a wrongful death case against the actor and comedian, following Cathriona White’s death from a drug overdose, was dismissed , according to Page Six of the New York Post, because of concerns about efforts by White to mislead Carrey about an STD she had. The NY Post said an email from Avenatti confirmed the case was “voluntarily dismissed by the plaintiffs,” adding he had no other comment “concerning the reasons for or circumstances of the dismissal.”
3. Avenatti & Patrick ‘McDreamy’ Dempsey Co-Owned a Coffee Shop Chain & Dempsey Sued Avenatti to Get Out of the Deal
In 2013, “Grey’s Anatomy” star Patrick Dempsey sued Avenatti to get out of his role as “part owner and public face” of Tully’s Coffee Shops, the bankrupt Seattle-based chain that first opened in 1992, that the actor and lawyer acquired for $9 million in a bidding war that included Starbucks. Avenatti was to put up the all the capital to purchase and operate the company, Global Baristas, according to the deal.
Instead, Avenatti borrowed $2 million, which he didn’t tell Dempsey, against the company’s assets, the actor claims. Avenatti had the money and Dempsey had the name, although Bloomberg said Dempsey identified himself as “member and manager.” Regardless, things did not work out. The Seattle Times reported at the time, Dempsey had “…several personal claims …against Avenatti” he wanted to deal with in arbitration. In the end, both agreed to end the litigation and a joint statement was issued saying that they were “happy that we have resolved our differences and have put this behind us.” Tully’s currently has less than 20 shops in the Seattle area. Keurig owns the coffee brand, Keurig Tully’s Coffee Inc. And the situation for Tully’s and Global Baristas, Avenatti’s company is not a good one. Dozens of the original stores have been shuttered with shops being evicted and Keurig itself is suing Avenatti and Global Baristas.
But in Avenatti fashion, according to the Seattle Times, a company rep emailed the paper saying Avenatti was counter-suing Keurig and the case, as of January 2018, was “nothing more than Keurig trying to beat Global to the courthouse …(and) Keurig better buckle up because they will be held accountable for their fraudulent conduct.”
4. Global Baristas & Avenatti Himself May Be Facing a $5 Million Tax Lien, IRS Documents Show
IRS documents provided to Heavy show Avenatti and his coffee company are looking at more than $5 million in tax liens. The kind of tax the government alleges Global Baristas and Avenatti failed to pay are what’s called 941 taxes.
According to the IRS, employers use Form 941 to report income taxes, social security tax, or Medicare tax withheld from employee’s paychecks and to pay the employer’s portion of social security or Medicare tax.” If Global Baristas and/or Avenatti have paid these assessed taxes that cover a period from September of 2015, that record is not either publicly available or Heavy is unable to locate such. The lien was placed in July of 2017.
The company and Avenatti were also facing a near $60,000 lien from King County, Washington, for 940 taxes that the IRS explains is “annual Federal Unemployment Tax Act (FUTA) tax” that, “together with state unemployment tax systems …provides funds for paying unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and a state unemployment tax.”
5. Avenatti’s Law Firm Has a Curious Bankruptcy Case With an Enigmatic Creditor
The involuntary bankruptcy case from a 2007 Avenatti firm, Eagen Avenatti has not gotten much press save for in law and business journals. The case involves a creditor, possibly a private investigator once employed by the firm named Gerald Tobin, who filed an ‘involuntary’ bankruptcy petition for a relatively small claim amount against Eagan Avenatti. Once a petition is filed in a bankruptcy court, the debtor has to respond usually within 20 to 30 days.
“California class-action law firm Eagan Avenatti LLP was plunged into Chapter 11 bankruptcy earlier this month,” Law 360 wrote about the case a year ago, “when an elusive Orlando creditor named Gerald Tobin filed an involuntary petition over a claim for payment worth less than $30,000.”
Tobin claimed he was owed $28,700 for services rendered, but as Law 360 noted, “the mysterious creditor was nowhere to be found. His whereabouts, indeed Tobin’s true identity, is one of many unanswered questions …”
In a January 2018 motion filed in Los Angeles bankruptcy court, The Recorder said, Eagan Avenatti asked the court to approve a “settlement and dismissal of that involuntary case.”
Avenatti argued since his firm does business on a contingency fee basis, it doesn’t “pay out fees and costs until litigation is concluded or settled, which often takes several years during which the [the firm] routinely invests millions of dollars in investigating claims, conducting discovery, hiring experts, and preparing for trial.”
Plus, Avenatti said in the motion that while the firm’s “revenue stream is ‘chunky’ …it is very profitable over time.’”