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The actor says his former lawyer Jake Bloom knowingly, recklessly or negligently failed to disclosed years of misconduct by his former business managers at The Management Group, whom he’s also suing. (Read more on that fight here.)
Specifically, Depp claims Bloom introduced TMG to Grosvenor Park to secure a hard money loan for the actor — without disclosing that he had a relationship with the company’s founder. The loan, through Grosvenor affiliate Tryon, was secured by Depp’s residuals from four installments of the Pirates of the Caribbean franchise, Alice in Wonderland and Into the Woods. The actor says in the three years since that loan agreement he’s earned $32 million in residuals but hasn’t received a penny because of the structure of that deal, which prioritizes payments to Bloom Hergott and TMG ahead of loan payments to Tryon.
Bloom Hergott’s answer to the complaint filed Dec. 11 features a general denial of the allegations and the assertion of 20 affirmative defenses, including that the actor or his other representatives are at fault for any losses.
“Ensuing injuries and losses, if any, were proximately caused and contributed to by the negligence, fault, and misconduct of Plaintiffs and/or their agents and representatives (whose acts, conduct, and/or omissions are chargeable to Plaintiffs),” writes attorney Peter J. Kennedy.
A four-page cross-complaint filed the same day focuses on a 1999 oral agreement between Depp and Bloom, which provided that Depp would pay Bloom’s firm a fixed percentage of his entertainment income, and claims the actor hasn’t paid his fees since July.
“We have alleged that Bloom doesn’t have any legal entitlement to fees dating not just to July, but all the way back to the inception of the client relationship,” Depp’s attorney Adam Waldman tells The Hollywood Reporter.
“Bloom’s court filings did not respond to any of the specific allegations in Mr. Depp’s complaint, including the allegation regarding the predatory hard money loan that has cost Mr. Depp tens of millions of dollars in just 3 years where Bloom fed Mr. Depp to another party who was actually an undisclosed Bloom client,” says Waldman. “Messrs. Bloom and Mandel then shoveled money from the loan proceeds immediately out the back door to themselves, and quietly smuggled in provisions to the loan providing themselves multi-million dollar rights off the top that they didn’t otherwise possess to Mr. Depp’s film residuals.”
Waldman has also argued that the Depp-Bloom oral agreement violates California law, which requires a written contract for contingent fee agreements between a lawyer and his or her client. (It’s an argument he’s also using against Robert and Joel Mandel of TMG, who are both licensed attorneys.)
Kennedy, in Bloom’s answer, argues that Depp knew of the facts alleged since as early as 1999 and failed to “use reasonable care to mitigate, minimize, or avoid any injury or loss.”
The actor is asking the court for a declaration that their agreement is invalid; Bloom, meanwhile, is now asking for the mirror image.
“Bloom Hergott seeks a declaration that the fee agreement between Cross-Defendants and Bloom Hergott be declared valid and enforceable and a declaration that Bloom Hergott is not required to disgorge any fees paid by Cross-Defendants for legal services that Bloom Hergott provided,” writes Kennedy in the cross-complaint.
In the event the court sides with Depp and declares the agreement unenforceable, Bloom Hergott is seeking the “reasonable value of its legal services.”
In preparing for litigation with Bloom, Waldman says Depp hired Stanford Law professor Nora Engstrom, an expert on legal ethics, who sent THR a statement Monday.
“Depp contends that Jake Bloom pocketed tens of millions of dollars, while flouting the very specific statute that governs the charging of legal fees in California — and he also, on numerous occasions, put his own interest ahead of his client’s,” she says. “While Bloom’s Answer and Cross-Complaint tries to throw up some technical defenses, nothing they say undermines or minimizes those basic and troubling facts. … Lawyers are supposed to serve clients with undivided loyalty and unswerving fidelity. Here, if it is proved that Jake Bloom was willing to sell Depp out to make a buck or to curry favor with another client, the ethical breach established will be egregious.”
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