The Financial Problems of Johnny Depp: Mismanagement and a Crisis of the Hollywood Lifestyle

The Hollywood Reporter this week highlights the case of Johnny Depp, who has recently sued his agency for mismanagement as the source of his financial troubles. The article, which details Depp’s behavior and lifestyle on set, with testimony from Jerry Bruckheimer, Tracey Jacobs, his agent, and Joel Mandel, owner of The Management Group, the agency, claims that it is Depp’s lifestyle choices that have led him to his current financial situation. The details are many and complicated, but in terms of the lawsuit itself, here is what THR reports:

“The possible catalyst for the lawsuit was a multimillion-dollar bridge loan TMG made to Depp in 2012. The managers say they tossed their client a lifeline as he faced default on a $5 million loan.

In his own lawsuit, Depp says he was kept in the dark about his finances and it was his ex-managers who weren’t handling his money wisely. (Waldman [Depp’s attorney] maintains that it was Depp, not Mandel and Bloom, who called the October 2012 meeting.)

Among other charges, Depp alleges that TMG disbursed almost $10 million in “loans” to his sister and other parties close to the actor without his knowledge and took out loans for Depp…TMG says the loans were needed to keep Depp afloat and that the actor was fully aware of them.

In addition to the loans, two other matters are central to the lawsuits.

First, the Depp suit claims, TMG failed to pay Depp’s taxes on time, resulting in $8.3 million in interest and penalties over the years — a claim TMG also denies, arguing that it had no choice, because the funds to pay the taxes were never available in April.

Second, perhaps most incendiary, Waldman alleges the Mandels were acting as both lawyers and business managers. Because they offered legal assistance, he says, they were bound by a California law forbidding attorneys from taking a percentage of clients’ earnings unless they have a contract expressly allowing them to do so.

Waldman’s case hinges on the question of whether the Mandels did indeed serve as de facto lawyers. Both were trained as attorneys but say they never did anything for Depp that would constitute legal work. (The law does not apply to agents, Waldman notes, even those operating without a contract.)”

While ultimately the case remains unresolved, one thing is clear, something is going to change in Hollywood as a result. Here are some of my predictions of what will happen as a result of the case:

  • Break Johnny Depp’s career or propel him forward
  • Bring in other similar cases that actors have with their agents if Depp wins
  • Change the actor-agent relationship in Hollywood from a personal and legal standpoint
  • Hurt Depp’s franchise ability, the actor being labeled as a liability risk

The full article can be found here: http://www.hollywoodreporter.com/features/johnny-depp-a-star-crisis-insane-story-his-missing-millions-1001513

 

 

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