14 nov 2017 - FORBES How Can Johnny Depp & Lisa Marie Presley Both Be Broke? New Court Fights Explore Who Is To Blame

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How Can Johnny Depp & Lisa Marie Presley Both Be Broke? New Court Fights Explore Who Is To Blame

BY Danielle and Andy Mayoras

It's a growing Hollywood trend ... tens of millions of dollars gone? Sue the guy who handled your finances! But, legally, who should shoulder the blame -- and more critically, pay the price -- when a celebrity once worth hundreds of millions sees most of it disappear? And what lessons are there for those of us whose net worth hasn't quite hit eight or nine figures?

Johnny Depp is the poster child for this dilemma after his reported net-worth of $200 million dwindled to a small fraction of what it once was. But Depp is far from alone. This summer, Alyssa Milano filed a $10 million lawsuit against her former business manager claiming financial ruin. And Lisa Marie Presley recently announced, through her attorney, that she is in the same boat, preparing to sue her former business manager for $100 million in losses.

The Depp lawsuit appears to be the most heated at the moment. Recently, Depp's former financial managers and advisors added a new lawyer to an already-ugly legal battle by filing to foreclose against two of Depp's houses, including his primary residence. The lawsuit alleges that when Depp was in deep financial trouble, his financial management company, TMG, came to his rescue with a five million dollar loan. TMG says it loaned the money on a short-term basis, to pay off another bank loan that was about to come due in late 2012. Depp agreed to sell off some his assets, including his beloved yacht (which he purchased for $10 million and spent another $8 million renovating) and repay TMG shortly thereafter, according to the lawsuit.

Depp never paid back most of the loan and instead fired TMG. In January of 2017, Johnny Depp sued TMG and its owners, asking for more than $25 million in damages and to rescind the $5 million loan. In that lawsuit, Depp claims that TMG engaged in gross mismanagement, fraud, self-dealing, and even lied to Depp to cause him to believe he was on solid financial footing when he wasn't. The suit also alleges that TMG took out massive loans without Depp's knowledge, for above-market interest rates, and doled out nearly $10 million to others who worked for or were close to Depp, but without the actor's knowledge or approval. Depp accused TMG of charging excessive fees and failing to pay his taxes and other debts. In the lawsuit, Depp points out that he has earned hundreds of millions of dollars in his career.

TMG counter-sued and used the occasion to detail, in a public-filing, Depp's outrageous spending habits, including spending about $2 million per month. These monthly bills included costs to maintain 14 different residences, $30,000 per month on wine, and $3.6 million per year for wages to his 40-person staff. TMG asked a judge to declare that Johnny Depp alone was responsible for his financial troubles and sought unpaid management fees in return. That was before the recent filing to foreclose on Depp's homes to secure repayment of the $5 million loan.

TMG and its owners also deny Depp's allegations. They claim that they kept him informed of his finances and repeatedly warned him to control his spending habits. This culminated in what they describe as a "come to Jesus" meeting with Johnny Depp, which led to the $5 million loan that they made to save him from financial ruin and public embarrassment. Depp now claims he didn't even know about that loan until after he fired TMG. He says he was completely in the dark and merely signed documents when TMG asked him to, not even knowing what he was signing.

The story is similar with Lisa Marie Presley. She once had an 85% interest in Elvis Presley Estates, inherited from her famous father. She claims that her financial advisor, Berry Siegel, sold those holdings and invested the proceeds. Within 10 years, Presley claims $100 million was gone, the investments tanked, and she was left with $14,000 in cash and hundreds of thousands of dollars of credit card debt and millions in unpaid taxes. As with the Depp lawsuit, she blames her former financial manager for lying about her financial condition and charging excessive fees.

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