The singer's former manager has accused Lynne and Jamie Spears of defamation, alleging that their claims that he drugged the star were untrue and had caused him "humiliation" and "distress".
Lutfi managed Spears during her public breakdown and said at the time that helping her was a "moral obligation".
He is said to be facing foreclosure on his California home after allegedly running up more than £12,000 in debts.
However, his lawyer Bryan Freedman said that housing bosses have merely lost Lutfi's payments, telling E! Online: "It's nonsense. The homeowners association misplaced two cheques. The cheques were paid.
"This is just more lies and misrepresentation about a guy who is a great caring human being."