Skip to main content

Michael Cohen’s Cooperation with Feds Happened After Trump Stopped Paying Legal Bills


President Donald Trump‘s former friend, attorney and “fixer” Michael Cohen has filed a lawsuit against the 45th president’s business empire in New York State.

Submitted early Thursday afternoon with the Supreme Court of the State of New York, County of New York, the 22-page filing accuses the Trump Organization of violating a contract by failing to indemnify Cohen over actions he took for the organization and its leadership. In law, the word indemnify means to “guarantee against any loss which another might suffer.”

The lawsuit notes:

[T]he Trump Organization agreed to indemnify Mr. Cohen and to pay attorneys’ fees and costs incurred by Mr. Cohen in connection with various matters arising from Mr. Cohen’s work with and on behalf of the Organization and its principals, directors, and officers. These matters included multiple congressional hearings, Special Counsel Robert S. Mueller III’s investigation, and others.

“As a result of the Trump Organization’s unfounded refusal to meet its indemnification obligations under the indemnification agreement, Mr. Cohen has incurred millions of dollars in unreimbursed attorneys’ fees and costs,” the filing continues, “plus additional indemnifiable amounts, and continues to incur attorneys’ fees and costs in connection with various ongoing investigations and litigation.”

Explicitly identifying Cohen as Trump’s “fixer,” the lawsuit references several controversies involving the onetime erstwhile attorney and the embattled current occupant of the White House.

The  hush money payments are one such controversy.

“In or around August 2016, at the direction of Mr. Trump, Mr. Cohen arranged an agreement between American Media, Inc., the parent company of the National Enquirer, and former Playboy model Karen McDougal that effectively buried a story of an alleged affair between Ms. McDougal and Mr. Trump,” the lawsuit notes. “Using a practice called “catch and kill,” Mr. Cohen arranged for American Media to pay $150,000 to Ms. McDougal for the rights to the story about the alleged affair. Upon information and belief, the McDougal Non-Disclosure Agreement gave American Media the exclusive rights to “any romantic, personal and/or physical relationship McDougal has ever had with any then-married man” and prevented Ms. McDougal from speaking publicly about the alleged affair.”

Stormy Daniels makes an appearance as well:

In or around October 2016, at the direction of Mr. Trump, Mr. Cohen paid $130,000 to adult film actress Stephanie Clifford, known professionally as Stormy Daniels, in exchange for Ms. Daniels’ agreement not to speak publicly about an alleged affair between Ms. Daniels and then-candidate Mr. Trump. Mr. Cohen used funds from a home equity line of credit (“HELOC”) that Mr. Cohen secured with his home through a company he owns, Essential Consultants, LLC.

According to the lawsuit, Trump’s reliance on and allegiance to Cohen remained strong and was given the legal artifice of a joint-defense agreement well after the special counsel investigation into Russian electoral interference and obstruction of justice.

“In or around July 2017, the Trump Organization entered into an agreement with Mr. Cohen under which the Trump Organization agreed to indemnify Mr. Cohen and, separately, to pay for his attorneys’ fees and costs in connection with Mr. Cohen’s representation and defense in the [Mueller] Investigations and other matters,” the lawsuit notes. “The Trump Organization and Mr. Cohen were proceeding pursuant to a ‘joint defense’ at that time with respect to the Investigations and other matters.”

And this agreement allegedly included promises by the Trump Organization to foot Cohen’s legal bills.

“The Trump Organization initially honored its indemnification agreement,” the filing notes. “On October 25, 2017, the Trump Organization paid $137,460.00 to [one of Cohen’s attorneys]. This amount reflected half of [the attorney’s] unpaid invoices at the time, with the Trump Organization promising at that time that the other half would be paid the following day by the Trump Campaign.”

And this agreement apparently worked out at first.

According to the lawsuit, “the Trump Organization continued to pay all or part of” Cohen’s legal fees “through at least May of 2018” and “continued to represent to Mr. Cohen, at least through June 2018, that it would continue to indemnify Mr. Cohen and pay his attorneys’ fees and costs in connection with the [Mueller] Investigations.”

And, before it all fell apart, the lawsuit notes, “[t]he Trump Organization secured the payment of over $1.7 million of Mr. Cohen’s attorneys’ fees and costs incurred.”

But the bills kept piling up and, in June of 2018, the Trump Organization decided to stop paying them. According to the lawsuit, this spigot of cash was shut off “without notice or justification.”

That same month, Cohen told friends that he was willing to cooperate with federal prosecutors and Trump publicly distanced himself from Cohen. Then, in July, Cohen vowed to “put his family and country first.”

Cohen’s suing the Trump Organization on four separate counts including breach of contract and violating New York’s implied covenant of good faith and fair dealing. He’s seeking in excess of $4 million in damages as well as a declaratory judgment that the Trump Organization is liable for his past and future legal expenses in connection with all of the ongoing investigations into Trump World in which Cohen might play a part.

Law&Crime reached out to Cohen’s attorneys for the civil suit as well as the Trump Organization for comment on this story but no response was forthcoming at the time of publication.

Read the full lawsuit below:

Michael Cohen Sues Trump Or… by on Scribd

[image via Spencer Platt/Getty Images]

Have a tip we should know? [email protected]

Filed Under:

Follow Law&Crime: