What Happened to Johnny Depp’s $650 Million?

What happened to $650 million? An explosive legal battle between one of Hollywood’s best-paid actors and the business managers he fired has laid bare tumultuous finances, outrageous spending and troubling behavior on Disney’s new ‘Pirates’ movie in a case that could even change how the industry does business.

Early one afternoon in October 2012, Jake Bloom and Joel Mandel left their respective Beverly Hills offices, slipped into their luxury cars and embarked on the roughly 30-minute journey to the Hollywood Hills compound of their client, Johnny Depp. Bloom was a rumpled and graying lawyer whose disheveled style camouflaged an intellect exercised on behalf of such luminaries as Martin Scorsese and Sylvester Stallone. Mandel, then in his early 50s, was a tall, rather amiable accountant who favored loose-fitting jeans and looser-fitting shirts, sartorial code designed to assure his clients he was just another boy in their band as well as a top-flight business manager steeped in the arcana of arbitrage and amortization.

Both men had been close to Depp for years. Bloom, indeed, was such a confidant to the actor that he had even joined him for an induction ceremony into the Comanche nation when he played Tonto in The Lone Ranger; as for Mandel, he had accompanied Depp to his three-island property in the Bahamas, atolls Mandel had helped his client buy for a total of $5.35 million.

These men were part of Depp’s inner circle, at least as far as any lawyer or accountant could belong to the inner circle of an artist this mercurial, one with a skull-and-crossbones tattoo on his leg and “Death is certain” scrawled beneath it, whose soul mates were such creative titans as Marlon Brando, Keith Richards and Hunter S. Thompson — the journalist whose ashes Depp fired from a cannon hauled to the top of a 153-foot tower, a tribute for which the actor says he paid $5 million.

Leaving their cars that day, the advisers approached one of Depp’s five houses on a dead-end stretch of North Sweetzer Avenue. A modernist affair that was simply referred to as 1480, the building had been converted into a recording studio and was an appendage to an eight-bedroom, castle-like mansion once owned by music producer Berry Gordy. One of the star’s two omnipresent assistants led the men in, past a painting that British artist Banksy had created for Depp, and into a den, where the actor was leaning back in a slightly battered chair, surrounded by dozens upon dozens of classic guitars.

After the obligatory small talk, the visitors got to the point: Depp’s cash flow had reached a crisis point, they declared. Even though the star had become wildly wealthy (later, Mandel would claim Depp earned more than $650 million in the 13-plus years he had been represented by The Management Group, the company Mandel had started in 1987 with his brother Robert), there just wasn’t enough liquid money to cover Depp’s $2 million in monthly bills.

Without a fire sale, Depp — then arguably the biggest star in Hollywood and certainly one of the best paid, thanks to the Pirates of the Caribbean franchise — would never be able to meet his obligations. Not the payments on his portfolio of real estate around the world. Not the impulse purchases such as the three Leonor Fini paintings he had bought from a Manhattan gallery (the first two for $320,000, the third as a $245,000 gift for then-girlfriend Amber Heard). Not the $3.6 million he paid annually for his 40-person staff. Not the $350,000 he laid out each month to maintain his 156-foot yacht. And not the hundreds of thousands of dollars he paid to sustain his ex-partner, Vanessa Paradis, and their children, Lily-Rose and Jack.

Mandel dug into his briefcase for a one-page summary he had prepared, but Depp waved it away. Still, after three hours, the actor agreed to a compromise: He would sell his beloved Amphitrite, the yacht he had bought for $10 million and spent $8 million renovating, where he’d hosted such friends as Brad Pitt and Angelina Jolie.

With his consent in place, Bloom and Mandel said their goodbyes, stepped out of the house and breathed a sigh of relief. The city stretched before them. The bright light that had bathed it when they arrived was fading and would soon give way to night.

That exchange, the start of an increasingly fraught relationship between the star and his team, would culminate in the 2016 firing of Mandel and Depp’s longtime agent, United Talent Agency’s Tracey Jacobs, along with a $25 million lawsuit filed Jan. 13 by Depp against the Mandels’ TMG, accusing them of fraud and mismanagement, among other things.

TMG has since countersued, alleging that Depp, now 53, failed to pay its commission on his income from the upcoming Pirates of the Caribbean: Dead Men Tell No Tales and painting a portrait of an out-of-control movie star, reeling from a nasty split from Heard and used to spending freely, including $30,000 a month on wine. The Mandels seek a court declaration that “Depp is responsible for his own financial waste”; Depp’s side wants them to pay him millions, claiming they served as lawyers as well as accountants and therefore — if Depp’s interpretation of a California statute is correct — had no right to a percentage of his earnings without a proper contract.

The lawsuits, along with multiple interviews conducted by THR, indicate that Depp’s capricious behavior and poor decision-making placed him in a serious financial bind, which paved the way for the rupture with his closest advisers. (All declined to comment; while Bloom has not been fired, he has had no contact with Depp for months.)

It is unclear how the actor’s problems have impacted his relationship with his sister, Christi Dembrowski, a longtime conduit to her brother and head of his production company who selected Mandel in the late 1990s as one of three potential business managers for Depp to interview. Dembrowski allegedly received $7 million in “loans” as TMG managed Depp’s estate. She, like Depp, did not respond to requests for comment.

The unfolding legal battle could shake some of Hollywood’s most established business traditions. Depp’s new attorney is challenging the common practice of lawyers taking a percentage of their clients’ earnings without a written contract. If the suit is successful, it could open the door to a host of similar challenges.

All this comes as Walt Disney Studios prepares for the May 26 release of its latest Pirates movie, the fifth in the series. Studio execs worry that Depp’s personal peccadilloes could impact the marketing of their $230 million-budget tentpole and future of a $3.7 billion box-office franchise. Six years have passed since the last Pirates installment earned more than $1 billion globally, and Depp’s most recent big-budget vehicle, Alice Through the Looking Glass, lost hundreds of millions of dollars for Disney; now it’s betting that the star’s private struggles won’t sink this movie, too.

Depp’s demons — which seemed to surface in November 2014, when he appeared to be inebriated while presenting at the Hollywood Film Awards — became public when he was living in Australia for Pirates 5. Filming ran from February until July 2015, a span during which allegations of conflict between him and Heard spilled into the Australian tabloids.

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SOURCE: Stephen Galloway, Ashley Cullins 
The Hollywood Reporter