Michael Avenatti, attorney and founding partner of Eagan Avenatti LP, speaks to members of the media outside the federal court in New York, U.S., on Monday, March 25, 2019. Avenatti was charged by federal prosecutors on both coasts, accused in New York of trying to extort millions of dollars from Nike Inc. and in Los Angeles of embezzling money from a client and defrauding a bank. Photographer: Louis Lanzano/Bloomberg
Recent headlines highlight a conundrum frequently presented to in-house counsel: When does an overly aggressive demand for settlement rise to the level of extortion?
On Monday, March 25th, the United States Attorney for the Southern District of New York charged celebrity lawyer Michael Avenatti with extortion. The complaint alleges that Avenatti attempted to extort sportswear apparel giant Nike by threatening to publicly release information that Nike made illegal payments to high school basketball players. In his demand, Avenatti threatened to release the information unless Nike agreed to pay his client $1.5 million and hire Avenatti, along with an unindicted co-conspirator, to conduct an internal investigation costing between $15 million and $25 million. Avenatti’s charge raises several intriguing questions surrounding sensationalist and over-reaching demands.
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