Update: Major Document About the Unauthorized Filing of the Bankruptcy Case.

Okay, this is a follow up to my post from yesterday. In order to get the entire picture of what is happening in this case, one needs to first start with how we got here? How, when and why did a receiver end up being appointed? You asked and the courts have so kindly delivered.  This 115 page document on April 18, 2019 helps us round out the details.

Page one actually opens with the filing about Global Baristas. In a strange way,  Global Barista’s bankruptcy and EA’s bankruptcy are all victims of Avenatti hiding money, transferring money to other accounts and not disclosing assets.  The parties also appear to agree that a Receiver needs appointing because any funds transferred to Global Baristas US, LLC were fraudulent transfers from Eagan Avenatti LLP (referred to in the next document as EA).  The document also attached the indictments filed in California because charges against him involve him obstructing IRS collections activities relating to Global Baristas US.

The way I am interpreting the document is that the Chapter 7 Trustee is saying that since the transfers were illegal, that they are in fact owed damages in the amount of the transfers.  Whatever money was transferred to EA, that money is now owed to Global Baristas.

One user on Twitter, known as @opinionspher examined the document and took two scrabs and offered their expert opinion on them:

“Avenatti signed all assets of Global to himself. They want the court to return the money he took from accounts and stop any future activity, including any assets he still has. It’s a little more complicated,  but that’s the general idea.””Avenatti signed all assets of Global to himself. They want the court to return the money he took from accounts and stop any future activity, including any assets he still has. It’s a little more complicated,  but that’s the general idea.”

It is so hard to summarize everything that Avenatti failed to do, but a table contents give us a clear understanding of why a receiver needs to be appointed for EA. Some of his actions included:

  • During Bankruptcy, Avenatti Secretly Deposited EA Fees From The Barela Ligitation Into Undisclosed Accounts and Then Transferred the Money to Pay-Off Avenattis Personal Debts.
  • During Bankruptcy, EA Received Millions of Dollars From Another Case EA Failed to  Disclose On Its Schedule of Assets.

Keep in mind that these things were things he is being charged within the California indictment. He shouldn’t’ have done that anyway but complicates matters with his bankruptcy settlements.

 

New Updates On the Unauthorized Bankruptcy Filing.

Links to related documents

Order Order To Appear on May 8th 

Avenatti Unauthorized Bankruptcy Case 8:19-bk-10822-CB

HEY THERE BBAs (blocked by Avenatti), if you find reading court documents is your idea of great bedtime reading then I have a treat for you! As you know, Michael Avenatti is due in court in Santa Ana on May 8th to answer to a complaint that the bankruptcy papers he filed violated an order appointing a receiver and a restraining order in the case of Eagan Avenatti LLP. It is District Court Case No. 8:08-CV-01644-VAP-KES. In short, Avenatti may not have had authority to file the paperwork.  The court-appointed receiver wants him held in contempt and sanctioned.

Avenatti Filed what is known as Voluntary Petition for Non-Individuals Filling for Bankruptcy March 7th .   He filed it within thirty minutes of a phone call with the court-appointed receiver telling he was not authorized to file the paperwork!

His filing shows 20 creditors with a debt somewhere around $3,890,819.27! I tried my best to add it all up but feel free to double check my numbers in the attached document.

Since filing that bankruptcy, there has been a slew of paper filings in this case.  And I want to tell you everyone about the Receiver! We should STAN him. And stan him hard!

His name is Brian Weiss. In the documents Avenatti submits to the court to defend his filing of the bankruptcy and to try to avoid appearing in court on May 8th, he deftly answers each and every one.

Avenatti is trying to use his current pending criminal cases to have the  Order to Show Cause (the reason he is allowed to file the bankruptcy petition) dismissed.  He tries to say that the OSC implicates his Fifth Amendment Rights

The criminal proceedings implicate testimony regarding the alleged misappropriation of funds by the Firm [EA], the Debtor and/or Avenatti; the assets and liabilities of the Firm and the Debtor; statements made by Avenatti under oath in pleadings and documents filed in the Involuntary Case; and the actions taken by Avenatti in the Involuntary Case. The instant bankruptcy case and the OSC involve and relate directly to those same issues and to the facts of the Involuntary Case.

Now Michael makes a good case, from what I can tell reading the document, but Weiss in submitting his written replies never misses a beat and expertly explains why Avenatti’s claims are without merit.  On page  166,  Weiss states the OSC has nothing to do with the indictments he is facing.

Avenatti believes a stay of the OSC will avoid prospective discovery motions brought by the parties arising out of an assertion of the Fifth Amendment.” Bankr. Dkt. Doc. 46(Stay Motion, p. 8 of 11, ll. 13-14). But the OSC hearing does not contemplate any further discovery. Either Avenatti will have a convincing explanation for the filing or he won’t.”

So, as of right now, Avenatti is still due in court to answer the OSC. It isn’t clear if he will suffer immediate consequences that day or if the judge will make a ruling that same day.

Also, Did you know that during the month of April there were filings made regarding the Global Barista’s case? Well, I did not and once I finish redacting some info that isn’t allowed to be made public, it will be posted here as well.