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Spendthrift or Swindle Victim? Fight Explodes Over Johnny Depp's Lost Millions

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Johnny Depp’s ongoing legal battle with his former business partners is reaching a fever pitch as both sides attempt to explain how the star’s $650 million fortune has dwindled away.

The actor filed a $25 million lawsuit against his ex-managers Joel and Rob Mandel at TMG in January, alleging that they swindled him out of millions through fraud, breach of contract and professional negligence. TMG fired back shortly afterwards, labeling the actor a hopeless spendthrift who squandered millions on extravagances like fine wine and art against their advice.

In their countersuit, TMG lists a number of eye-popping expenses they say cost Depp $2 million in monthly bills.  The complaint alleges he paid $3.6 million a year for a 40-person staff, $30,000 a month on wine, $400,000 on a diamond cuff for his ex-wife Amber Heard and $5 million to shoot the ashes of his friend, author Hunter S. Thompson, out of a cannon in Aspen. 

They also claim the actor, whose Pirates of the Caribbean: Dead Men Tell No Tales comes out May 22, spent over $75 million on property (including a chain of islands in the Bahamas and a French chateau), $18 million to acquire and maintain a luxury yacht and tens of millions on an art collection, including works by Warhol, Klimt, Basquiat, and Modigliani.

RELATED: Lawsuit Claims Johnny Depp Is in Financial Crisis Due to Spending $2 Million a Month on ‘Ultra-Extravagant Lifestyle’

But Depp’s attorney Adam Waldman asserts to PEOPLE that the actor has not spent nearly as much as he’s made, and his business managers took far more than their share. In addition, he argues that much of what TMG labeled hapless expenses were actually shrewd business investments.

“What do Johnny Depp’s investments in real estate and art,  which have appreciated wildly, have to do with a fraud case?” asks Waldman. “For example, the island in the Bahamas that he bought for $5.3 million is now worth many times that. Similarly, the chateau in France that he bought for single-digit millions is now on the market for $30 million, the Basquiat paintings that he bought for a few million were sold for $14 million, and on and on it goes.”

Johnny Depp’s island in the Bahamas.
Landov; Getty

TMG argues they went through great lengths to convince the actor to unload his French chateau. He purchased the property, near St. Tropez, for an unknown sum before adding $10 million in renovations. When his former business manager allegedly asked him to sell it in 2015, Depp initially agreed. “I am ready to face the music, in whatever way I must,” he texted his manager, according to the TMG countersuit. “I know there’s a way to dig ourselves out of this hole and I am bound and determined to do it.” 

Johnny Depp’s French estate.
Alexander Kraft of Cote d'Azur/Sotheby's International Realty

The property was put on the market for $27 million, but sources told The Hollywood Reporter that Depp’s former girlfriend Vanessa Paradis and their daughter Lily-Rose then talked him out of selling. Despite being in difficult financial straits and having three potential buyers lined up, Depp reportedly pulled the house off the market. It has since been re-listed, Waldman notes.

Beyond Depp’s spending history, the case involves loans made from TMG to Depp, his claim the managers failed to pay his taxes on time, and his assertion that over the course of his career TMG “was paying themselves over $28,000,000 in contingency fees without any written agreement.” In California, lawyers are not allowed to take a percentage of clients’ earnings without a written contract. The Mandel brothers are both lawyers, though they argue that they were not doing legal work for Depp and only acted as business managers.

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 Crucial testimony for this case could come from a former TMG employee, whose claims are currently under temporary seal. While TMG argues the woman is simply a former “low level clerk” out for revenge, Waldman says she’s a whistleblower who “managed the day-to-day Depp account for over two years and provided over 8 hours of sworn testimony and documents in this matter.” The judge will rule whether to unseal the woman’s testimony and documents May 26. 

If a judge agrees with Waldman, and rules that the Mandels were members of the California Bar who performed any legal function at all for Depp, the case could have a major impact on how lawyers operate in Hollywood moving forward“This case against the Mandels points to a larger problem in Hollywood — a non-legal sense of entitlement among some advisors to the earnings of their clients,” Waldman argues. “This case shines a light on some of the worst practices, and may cause systemic changes to some of the most abusive unwritten industry customs.”