(CNN) Michael Cohen's shell company, Essential Consultants, filed a status report Friday evening agreeing to tear up the original 2016 agreement with adult film star Stormy Daniels, in which Cohen arranged to pay her $130,000 to stay silent about her alleged affair with President Donald Trump.
This so-called "hush agreement" has been at the root of some of Cohen's legal troubles and scrutinized in the criminal investigation that ultimately led to his plea last month. Cohen was Trump's personal lawyer for years. Trump has denied having an affair with Daniels.
"Today, Essential Consultants LLC and Michael Cohen have effectively put an end to the lawsuits filed against them by Stephanie Clifford aka Stormy Daniels," said Brent Blakely, Cohen's lawyer. "The rescission of the Confidential Settlement Agreement will result in Ms. Clifford returning to Essential Consultants the $130,000 she received in consideration, as required by California law."
As a part of the status report, Essential Consultants -- the shell company Cohen set up to make the payment to Daniels -- requested that she pay back the $130,000 she received.
Part of the thinking, according to a source familiar, is that Cohen no longer benefits from Daniels remaining silent -- and that she has already spoken out as much as she possibly can about her alleged affair. Daniels has discussed her alleged affair with Trump in the media, including an interview on CBS' "60 Minutes" in the spring where she described her version of events.
Michael Avenatti, Daniels' lawyer, said in an interview on CNN's "Cuomo Prime Time" that he received news of the filing just before going on air.
"I haven't had a chance to digest it, I just saw it on my email literally right before I came on," Avenatti said.
"What they're trying to do is they don't want me to get a chance to depose Michael Cohen and Donald Trump," he added. "This is a hail Mary to try and avoid that, that's my first guess."
Cohen has found himself on the wrong side of the law after the FBI raided his office, hotel room and home in April as a part of the Southern District of New York's investigation.
Cohen admitted in August to arranging a nondisclosure agreement with Daniels to buy her silence about her alleged affair with Trump. Cohen pleaded guilty to making an excessive campaign contribution, since the $130,000 payment was made in service of the campaign and exceeded the $2,700 federal limit for campaign donations.
Cohen has recently told friends he feels isolated from the President and told ABC News in July that his first loyalty is to the country and his family, not Trump.
Cohen was a part of Trump's inner circle for a decade, working as his personal attorney at the Trump Organization. He continued to advise Trump following the election as well. Cohen felt so strongly about the President that he once said he would take a bullet for Trump, but the relationship has frayed in recent months.
But, Avenatti told CNN later Friday that he believes this latest manuever is an attempt by Cohen to get back into Trump's good graces.
"Michael Cohen is playing a game in an attempt to avoid his deposition and that of Mr. Trump," Avenatti said. "He is back to doing Trump's bidding and acting as a fixer."
He added that Daniels will only pay back the money if the court allows Cohen and Trump to be deposed and rules in her favor in the case.
This story has been updated.