Johnny Depp will not be facing off against his ex-managers in the courtroom, as the actor has settled his legal battle with The Management Group (TMG) one month before the scheduled trial.
Back in January 2017, the Associated Press reported that Depp and his new business manager Edward L. White were accusing the actor’s former business managers Joel and Robert Mandel and their company “TMG” of “professional negligence, breach of fiduciary duty as trustee, fraud in the inducement, fraudulent concealment, constructive fraud, negligent misrepresentation, unjust enrichment, wrongful foreclosure, declaratory relief and accounting.” The suit seeked $25 million in damages.
According to the suit, Depp alleged that the Mandels “failed to properly pay his taxes, made unauthorized loans and overpaid for security and other services,” and contends the firm “actively concealed the true state of Mr. Depp’s finances while driving him deeper and deeper into financial distress.”
The suit states that Depp hired the Mandels in 1999, noting that they received five per cent of his income from such hits as “Pirates of the Caribbean” and its sequels, as well as “Alice in Wonderland” and “Charlie and the Chocolate Factory.”
Most explosively, the lawsuit claimed the managers failed to file Depp’s tax returns on time, which cost him nearly $5.7 million in penalties. The lawsuit also alleged the company overpaid for a variety of services, “including forgetting to terminate the lease on a home where Depp’s mother lived temporarily, and spending $8 million on security between 2012 and 2015 alone.”
In the suit, Depp said he only learned of the extent of the problems when he fired the Mandels and hired a new management company in March 2016.
Shortly after Depp filed suit, the Mandels responded by issuing a countersuit, claiming that Depp actually owed them millions.
The trial was set for August 15, but according to Deadline, the two sides reached a settlement over the weekend with Peter Lichtman, a retired judge serving as an arbitrator.
Kump added: “In December 2012, Depp faced financial ruin with the impending default on a $5 million bank loan. The Mandels bailed him out by loaning him $5 million, which he promised to repay by January 2014. Although Depp later changed managers, he never alleged any wrongdoing. In October 2016, with Depp still owing $4.2 million, the Mandels started non judicial foreclosure proceedings against certain of Depp’s properties. Depp’s lawsuit, filed on the eve of the sale of those properties, is a transparent attempt to derail the foreclosure by concocting and spreading malicious lies about the Mandels. His tactics and lawsuit will fail, and he will be forced to pay back the loan as promised.”
Two weeks after the suit was launched, The Mandel Company fired back with some legal ammunition of its own, slamming Depp with a cross-complaint alleging fraud and claiming the actor was well aware of the dire state of his finances.
“TMG did everything within its power over the last 17 years to protect Depp from himself and to keep Depp financially solvent,” stated the complaint, as reported by Deadline. “However, ultimately TMG did not have the power or ability to control Depp’s spending or his numerous other vices, or to force Depp to make wiser financial decisions.”
The cross-complaint noted that “Depp claims that throughout his 17-year relationship with TMG, he was kept ignorant about his financial condition. That allegation is absurd and untrue,” adding that the company is owed more than $560,000 in unpaid commissions and credit card fees as well as a court declaration that the Mandel Company “complied with all of its fiduciary obligations under the law and that Depp is responsible for his own financial waste.”
In fact, the complaint alleged that Depp was well aware of his financial issues, and allegedly sent the following text message to a Mandel Company staffer in 2015: “I am ready to face the music, in whatever way I must. I know there’s a way to dig ourselves out of this hole and I am bound and determined to do it.”
In fact, the cross-complaint denies the company had anything to do with Depp’s financial troubles, placing the blame squarely on the star’s out-of-control spending, claiming Depp was burning through more than $2 million per month. “Depp further alleges in his complaint that he only learned about his financial problems in March 2016 when he hired Edward White of Edward White & Co., LLP in Woodland Hills, California. This charge is also false,” states the complaint.
“For years, TMG repeatedly informed Depp and Dembrowski and personal lawyer, Jake Bloom, that Depp was living beyond his means, and urged him to spend less and to sell certain expensive but unnecessary assets to repay loans and pay his taxes and living expenses,” read the complaint, which then goes on to list some of the actor’s most egregious alleged spending, including: $75 million “to acquire, improve and furnish 14 residences” around the world; $3 million to shoot the ashes of late “gonzo journalist” Hunter S. Thompson’s ashes out of a cannon; full-time personal security; 45 luxury cars; $10 million a year to support an entourage of friends, family and personal employees; fine wines flown in from around the world at a cost of $30,000 a month; “millions to acquire and maintain a massive and extremely expensive art collection including over 200 collectible pieces and works by world-famous artists such as Warhol, Klimt, Basquiat, and Modigliani;” approximately 70 collectible guitars; $200,000 per month on private jet travel; and loans from Disney, with interest rates of up to 10 per cent.
“When Depp’s spending outpaced his earnings, and he refused to change his lifestyle, he was forced to borrow large sums of money to continue living the lifestyle he chose,” Kump explained in the court documents.
“Over 30 years, TMG has never been sued by a client,” Kump told Deadline. “The only reason Depp filed this lawsuit was to interfere with TMG’s ongoing efforts to be repaid on the loan they had made to bail him out. TMG worked day and night to professionally manage Depp’s business affairs, adhering to the highest standards.”
However, Johnny Depp’s personal lawyer, Adam Waldman, told ET Canada that his client didn’t sue the Mandels for financial distress, he sued them for fraud, and he offers the following reaction: “How cataloguing alleged spending by Mr. Depp of his own money could somehow absolve the defendants of a large and multi-faceted mosaic of wrongdoing will ultimately be determined by the Court.”