Maria Puente

USA TODAY

How does one lose nearly $40 million and not notice until it's too late? Or, put another way: How does one spend $75 million on one's lifestyle, allegedly including $30,000 a month on wine, and not notice the dwindling bank account?

These are questions intriguing celebrity watchers everywhere, not to mention ordinary schmoes, as news of Johnny Depp's latest legal woes over a dispute with his former business managers ricochets around the world.

He's suing The Management Group and two of its attorneys, accusing them of mismanaging nearly $40 million of his money by allegedly collecting fees he never approved, incurring penalties for failing to pay his taxes, and loaning millions without authorization.

The managers have just counter-sued asserting that Depp frittered away his millions, despite their repeated warnings, on such goodies as a multi-million-dollar collection of 200 paintings (Warhol, Klimt, Basquiat, Modigliani); collections of jewelry, 70 guitars and 45 luxury vehicles; an $18 million yacht; private jets rides; and $75 million for 14 real-estate acquisitions, including multiple homes in Hollywood and penthouse lofts in downtown Los Angeles, a farm in Kentucky, a chain of Caribbean islands and a chateau in France.

Oh, and the aforementioned, eye-popping $30,000 a month in wine. Thus, the headlines.

Depp is seeking $25 million in damages in his suit. According to his complaint, Depp fired the managers last year, after being told to sell his French property to remain solvent, and hired a new manager who then discovered the alleged mismanagement.

Lawsuit: Johnny Depp's $2M monthly spending to blame for money woes

"Mr. Depp is one of the most sought after and highly paid actors in the world," his attorney, Matthew Kanny, wrote in Depp's complaint. "He is also the victim of the gross misconduct of his business managers who collected tens of millions of dollars of contingent fees, purportedly based on an oral contract, all at Mr. Depp's expense."

The managers say they are not to blame. "Depp, and Depp alone, is fully responsible for any financial turmoil he finds himself in today," the managers' lawsuit countered.

Depp is not the first star to tussle with business managers over their financial affairs. Nicolas Cage, Matt LeBlanc, Lisa Kudrow, Shannen Doherty, Lil' Kim, the late Leonard Cohen and a host of other Hollywood types have done the same in recent years. And that doesn't even count the sports stars.

What's the likelihood that this latest Depp legal morass will end up in court where everyone can feast and fume over juicy details? Not very high. Remember what happened to Depp and Amber Heard's toxic divorce, which led to even more lurid headlines: It was settled out of court.

"Take it from someone who does this for a living: It's really easy to make accusations in court, but it's crunch time when you have to decide whether you can prove it, and if you can't, that's when you start talking settlement," says Anthony Sabino, a top litigator (Sabino Law) in New York and a professor at St. John's University's Tobin College of Business in New York.

Devin McRae, a Los Angeles lawyer who has handled similar celebrity-manager legal disputes as a partner in Early Sullivan Wright Gizer & McRae, says going to trial is always an expensive and inconvenient "roll of the dice."

"The war of attrition is in the public filings, they're shots across the bow to see whose story is going to pick up traction with the public," McRae says. "The lawyers can get a preliminary reading on how the average juror might react by reading the comments on (stories about) salacious pleadings."

Still, whoever is to blame, how can millions go missing without someone pulling an alarm?

"They wanted him to sell the chateau or he'd be insolvent? Well, how did he get that close to insolvency (and not know it)?" says Domingo Such, partner at the Chicago law firm Perkins Coie, who advises rich people and families on tax, trust, and estate planning. If what Depp's lawsuit says is true, he says, there's plenty unconventional about the way his money was managed.

" 'Oral agreements' between business managers and clients? That's not the epitome of best practices for lawyers and business managers," Such says. "You would not allow Depp to do a movie without a written contract so why would you enter into a business arrangement without formalizing it?"

But it is easy for a star to forget to pay attention to his financial affairs in the press of other commitments, says Sabino, who describes himself as a fan of Depp's.

"Does he have formal training in finance or money management? He's a great actor but he is a great businessman?," Sabino says. "He's devoted to his craft. He has no time nor energy to devote to managing his money so he could easily lose track of that. That's why (stars) hire professional managers."

McRae says these managers market themselves to busy, high-earning creative artists by telling them: "We will take care of everything for you, for a fee, so you don't have to worry." When disputes arise, he says, it's not unusual for business managers to allege it's the client's fault due to lavish overspending.

"The client has an expectation that, 'I don’t have to review bank statements every month or manage my manager,' " says McRae. "You’re ceding a significant amount of money to (managers) to take care of everything for you, for typically a 5% fee, and for a high earner that’s a lot of money. What other situation do you do that? With that comes a lot of opportunity for malfeasance."

These professionals would include lawyers to handle a star's contracts and real estate deals, managers and agents to handle his career moves, accountants to handle his taxes, investment counselors to handle his investments, and so on. All of them are in a crucial position of trust, Sabino says; they have a fiduciary duty to take care of the client's money for the benefit of the client alone.

Sometimes those advisers will make bad decisions, he says. Sometimes they will engage in illegal self-dealing and fraud.

"The majority of these cases do not go to court, they get settled," Sabino says. "I have no study quantifying this but it's just horse sense. In the majority of cases, mistakes were made, there's no fraud involved, there's pointing of fingers. It comes down to more of a back-and-forth of accusations and it's more a matter of perception of who’s to blame."

If, as Depp's business managers claim in their suit, they were aware that his spending was out of whack, they should have documentation that they warned him about it, McRae says.

"It's incumbent on a business manager to tell (a client), no, you can’t (spend) this or here’s what’s going to happen, and that's going to be the overarching factual dispute in this case — did they try to put the brakes on this?" McRae says.

If the client refuses to listen to advice, then a prudent manager might have to tell the client goodbye, "because all you want to do is spend more than what you make."