posted 06-13-2018 02:09 PM                  

By Brooke Singman | Fox News

Adult film star Stormy Daniels could become entangled in the legal controversies surrounding her attorney Michael Avenatti, as a lawyer seeks millions in legal fees from his firm -- potentially including money raised for Daniels' case.

Last month, a federal bankruptcy court ordered Eagan Avenatti to pay $10 million to attorney Jason Frank, who used to work at the firm and claimed the company stiffed him on the first installment of a $4.85 million settlement.

The Los Angeles Times reported that Frank has since asked a bankruptcy judge to give him access to all legal fees (up to $10 million) the firm could collect from clients in dozens of cases, including Daniels' bid to nix a nondisclosure agreement concerning an alleged sexual encounter with President Trump.

That reportedly could put the money raised through a crowdfunding site in the crosshairs.

Avenatti and Daniels, whose real name is Stephanie Clifford, set up a crowdfunding website for her lawsuit and legal fees in March. More than 16,500 people have donated to Daniels and Avenatti—reaching more than $577,000, according to CrowdJustice, which runs the fund.

Federal bankruptcy court judge in Southern California ordered a law firm managed by Michael Avenatti to pay $10 million to a former colleague who claims the firm misstated its profits.

But Avenatti told Fox News on Wednesday that “under no circumstances” could Frank obtain Daniels’ funds, as Eagan Avenatti, LLP “has never represented” her.

“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.”

Avenatti added: “The motion is meritless.”

Daniels is represented by Avenatti and Associates, according to court documents obtained by Fox News.

Frank did not respond to Fox News’ request for comment.

Avenatti is representing Daniels in a case against former Trump Organization attorney Michael Cohen and Trump. Cohen paid Daniels $130,000 in the days leading up to the 2016 presidential election in exchange for her silence over a one-time sexual encounter with Trump in 2006 that the president denies.

Coverage of Michael Avenatti turns skeptical.

Cohen is now under criminal investigation as part of a grand jury probe into his personal business dealings.

But Avenatti’s personal business dealings have come under scrutiny in recent months. Fox News confirmed last month that Avenatti was under investigation by the California State Bar over allegations related to his stewardship of the bankrupt Tully’s Coffee chain. The ownership group, Global Baristas LLC faced a lien for unpaid federal taxes worth approximately $5 million.

Avenatti has also claimed that the tax lien in question "is related to an entity that was owned by another company that I used to have an interest in." He told Fox News, "At no point in time was I ever responsible for any taxes for Global Baristas US LLC, nor was I ever a member of that entity, nor did I own any direct interest in that entity."

Court records detail Avenatti’s extravagant lifestyle, with monthly expenses running to about $40,000. He’s a noted collector of watches and artwork, uses a private jet to travel, and leases expensive cars, his wife claimed in case documents. Lisa Storie-Avenatti has suggested he was avoiding their divorce proceedings.

Watch more on the video here.