As debate raves throughout the nation over the Mueller report and its implications for the future of our democracy, it’s comforting to know that Americans of all political stripes have at least one thing around which we can unify: bemused scorn for Michael Avenatti. On Monday, the TV legal representative and erstwhile vanity presidential prospect was detained for his function in a harebrained scheme in which he allegedly attempted to obtain Nike (sure) for someplace between $10 million and $22.5 million (why not), depending on his mood at any specific moment (which sounds, evaluating by the criminal complaint versus him, as if it is frequently really, very bad).
Avenatti, it seems, just recently gotten as a client an as-yet-unnamed basketball coach in California, who claimed that Nike had privately paid high school basketball players and their households to play on the coach’s Nike-sponsored AAU team. Last week, Avenatti presumably called Nike’s lawyers and threatened to expose these payments in a press conference that would coincide with the start of March Insanity—and, possibly simply as importantly, would take place on the eve of Nike’s March 21 quarterly earnings call. He promised not to do so, nevertheless, if Nike would (1) pay his customer a $1.5 million settlement and (2) either hire Avenatti to conduct an “internal investigation” of Nike, or—if Nike chose to hire a different entity to do the job—pay Avenatti two times what Nike paid the other firm, probably as a guarantee of Avenatti’s silence.
It is not unusual for legal representatives to seek extrajudicial settlements on behalf of their clients. Nor is it unusual for law firms to conduct this kind of internal investigation, mainly because commissioning them permits evil corporations to show prosecutors that they took misconduct seriously, if it were to ever come up in a future judicial case. What the law frowns upon, nevertheless, is extortion, which is exactly what a “hire-me-or-else-I-tank-your-stock” risk amounts to. Nike’s lawyers asked Avenatti for a little more time to make a choice—and then, after what I imagine to be a filled and hilarious late-night conference call, they chose to call the feds.
The next day, with law enforcement listening in, an obviously irritated Avenatti responded to Nike’s stall strategies by morphing into some mix of Saul Goodman and Denzel Washington throughout the last scene in Training Day. “Let’s not bullshit each other,” he said. “We all know what the truth of this is.”
After that, the two sides agreed to one more conference, throughout which Avenatti helpfully abandoned whatever pretenses of legitimacy to which he had previously clung. In it, he demanded that Nike fork over an up-front $12 million “retainer,” seemingly as part of the “internal investigation,” that the two sides would consider “earned when paid.” When a Nike attorney opposed that they’d never ever received such an quantity for similar work, Avenatti asked if they’d ever “held the balls of the client in your hand where you might take 5 to six billion dollars’ market cap off of them.” Finally, Avenatti recommended that Nike could avoid maintaining his company by paying a swelling amount of $22.5 million, “and we’re done …[and] we ride off into the sunset.” All of this is the sort of flamboyant language one definitely must prevent when trying to disguise extortion payments as reasonable fees for services rendered!
Avenatti concluded with some lovely invective in which he repeated his previous risks and, for excellent step, name-checked Donald Trump and R. Kelly. I honestly have no concept which of these two guys would find the association more offensive.
As incredible as this might seem, on the other side of the country, law enforcement authorities in southern California were simultaneously putting the completing touches on a separate lawbreaker complaint against Avenatti, which was likewise unveiled today. In this one, they allege that he falsified tax returns in order to acquire a $4 million bank loan, avoided out on filing actual tax returns, and at one point embezzled a $1.6 million settlement to financing a string of Tully’s Coffee stores in Washington and California. You do not have to be a state-barred attorney to comprehend that costs a customer’s loan on one’s restaurant franchise side hustle is not a prudent choice.