Word of the bar investigation clearing Michael Avenatti came Tuesday afternoon, shortly before police in Los Angeles reportedly responded to an incident of alleged domestic violence. Police took Avenatti into custody Wednesday.
The agency that regulates lawyer conduct in California has cleared celebrity attorney Michael Avenatti of claims of fraudulent and unethical business dealings while he ran the Seattle-based Tully’s coffee chain, according to letters sent to him and the Bellevue lawyer who formally filed the complaint.
“The State Bar has completed the investigation of the allegations of professional misconduct reported by David Nold,” according to the letter sent to Avenatti, who provided The Seattle Times with a copy. “We have determined that this matter does not warrant further action. Therefore, the matter is closed.”
Nold, a Bellevue lawyer who represents landlords and other creditors of the failed coffee chain, filed the complaint in April. He contended that while Avenatti ran Tully’s parent company, Global Baristas, Avenatti stole millions in state and federal tax withholdings from employee paychecks and fraudulently transferred $100,000 from the coffee business to hire lawyers for his law firm’s unrelated bankruptcy case.
Avenatti has denied the allegations to the bar and blasted Nold as dishonest. On Tuesday, Avenatti wrote in an email to The Times that the outcome of the bar’s investigation demonstrates that.
Most Read Business Stories
- Beleaguered WeWork and Martin Selig dissolve deal for Seattle tower
- In their 50s, this couple is turning over a new financial leaf | Money Makeover
- In heart of Amazon’s Seattle headquarters, a first-of-its-kind family shelter takes shape for Mary’s Place VIEW
- Fortnite goes dark. Gamers wonder what’s next.
- Tegna seats, possible sale are said to be sought by investor
“I have said all along David Nold is an unethical liar. I was just proven right,” Avenatti’s email said.
Word of the bar investigation clearing Avenatti came Tuesday afternoon, shortly before police in Los Angeles reportedly responded to an incident of alleged domestic violence. Police took Avenatti into custody Wednesday after the allegation, multiple news agencies reported.
Nold, in a statement Wednesday, said the California bar recently notified him “that it does not currently believe it has clear and convincing evidence of violations of the state’s ethics rules,” but the agency also invited him to provide a written response within 90 days “to supplement the record and assist it further in the investigation.”
“Contrary to the malicious and personal attacks leveled against me for filing the Grievance, my motivation has always been solely to bring justice to the government and citizens of Washington State that were victimized by the undisputed and colossal failure of Global Baristas US, LLC,” Nold’s statement added.
A spokesman for the State Bar of California said in an email Wednesday that since the agency’s complaint process is confidential, “we are not able to confirm or deny whether there is or was an investigation into any particular attorney.”
Late last year and earlier this year, Global Baristas shuttered or vacated all of its Tully’s stores and has been the target of more than 50 state and federal legal complaints. Various landlords, vendors and other creditors have won default judgments for unpaid rents, goods or services against the coffee company for hundreds of thousands of dollars, court records show.
Amid the turmoil, Avenatti, who had been Tully’s principal owner for several years, separately rocketed to fame as the lawyer for porn star Stormy Daniels and a chief adversary of President Donald Trump.
Avenatti, who is said to be exploring a run for president, has distanced himself from the failed company, saying he no longer owns Global Baristas and isn’t responsible for any legal judgments and overdue taxes owed by it.
“None of this is my problem,” he said in an telephone interview last month. “You’ll have to contact the owners of Global Baristas. I sold the company for $28 million in cash a long time ago. I’m not responsible for any of this; it’s never been my responsibility.”
He has declined to disclose who owns the company, describing the new owners only as a “conglomerate.”
Last month, three landlords and a former Tully’s store manager who are collectively owed more than $200,000 in unpaid rent and other legal judgments jointly filed a petition in federal court in Seattle seeking to force the embattled coffee chain into bankruptcy.
“The bankruptcy will shed light on many of these issues because no longer will those who were running the company be able to hide either their identity or conduct,” Nold’s statement said.