The actress is expected to be charged with felony grand theft for allegedly stealing a $2,500 (£1,660) necklace from a Venice, California jewellery store on Monday (07Feb11).
The legal tussle could send Lohan back to jail, but she maintains the necklace she is accused of swiping was loaned to her.
And now her attorney Shawn Chapman Holley has released a statement insisting the actress will fight any charges brought against her.
Holley says, ""We vehemently deny these allegations and, if charges are filed, we will fight them in court.""
According to law enforcement sources, Lohan was seen in store security footage wearing the necklace before it was reported missing.
A Lohan associate took the necklace to the Pacific Division police station just before a planned police raid on her premises.
And Lohan's ongoing legal troubles don't end there - she is also under investigation in Riverside County for allegedly assaulting an employee at the Betty Ford Clinic during her recent rehab stay there. Lohan has denied any wrongdoing.