LOS ANGELES _ After months of demanding transparency from President Donald Trump on his alleged affair with porn star Stormy Daniels, Michael Avenatti persuaded a federal judge Wednesday to block the news media from covering his testimony about his law firm's bankruptcy.
Eagan Avenatti, his Newport Beach firm, has defaulted on millions of dollars in debt and fallen years behind in paying its payroll taxes.
Avenatti, the firm's managing partner and majority owner, was subpoenaed by former firm employee Jason Frank to testify Wednesday in U.S. Bankruptcy Court in Santa Ana. Frank is trying to collect on a $10 million judgment he won against the firm.
At Avenatti's request, Judge Catherine Bauer let him testify Wednesday morning in secret. Avenatti argued that his firm's finances and its client roster should not be exposed despite a voluminous public case file that already chronicles its troubles in great detail.
"They want to embarrass me," Avenatti said of Frank and unnamed others.
Avenatti also asked Bauer to seal the transcript of his testimony. The judge made no immediate decision on the request. Bauer refused to allow attorneys for the Los Angeles Times and other news organizations to argue that Avenatti's testimony must take place in open court. The media outlets planned to voice their objections at an emergency hearing Wednesday afternoon before another bankruptcy judge, Scott C. Clarkson.
For Avenatti, a fixture on cable news since he began representing Daniels nearly five months ago, the demand for secrecy was a notable change in posture.
For weeks, he has been demanding that the president's former lawyer Michael Cohen "come clean" and release tapes and documents involving the payment of $130,000 to Daniels in return for her silence about an alleged one-night stand with Trump in 2006.
But as Avenatti has savored the publicity that the case has brought him, his financial troubles have deepened, due mainly to Frank's $10 million judgment.
Frank has alleged that Eagan Avenatti cheated him out of millions of dollars in pay, a charge that Avenatti denies.
The firm has defaulted on more than $880,000 in federal payroll taxes, penalties and interest that Avenatti had promised to pay. The Internal Revenue Service asked Bauer to hold the firm in contempt of court, but set aside the request Wednesday after reaching a deal for payment, according to the U.S. attorney's office in Los Angeles.
"Your honor, the payroll taxes need to be paid as soon as possible," Assistant U.S. Attorney Najah Shariff told Bauer shortly before Avenatti began testifying behind closed doors in a courthouse conference room.
Nonetheless, Avenatti said by email, "All issues with the IRS are fully resolved."
Two weeks ago, Bauer issued a restraining order to block Eagan Avenatti from spending any fees it collects while its debts to Frank and the IRS remain unpaid.
The order covers fees from 54 court cases, including the suit Daniels filed against Trump to void the nondisclosure pact that bars her from talking about their alleged sexual encounter.
