Johnny Depp v. TMG: What are a business manager’s duties of care?

business manager's duties of care

The Question: What standard of care and what attendant duties does a business manager owe to their client?

The Answer: It depends on what roles and services the business manager fulfills for their client. A good argument can be made that the business manager owes a similar fiduciary standard of care to their clients as a trustee owes to the beneficiaries of a trust.

The Lawsuit: On January 13, 2017 Johnny Depp filed suit against his long-time business manager TMG arguing that the business manager failed to act prudently and in good faith in the administration of Mr. Depp’s assets.

The Legal Principle: The outcome of this case will likely turn on what standard of care and what specific duties the business manager owed to their client. Depp has argued that the business manager owes him a fiduciary standard of care and his actions, or inaction, should be judged against the “skill, care and diligence of other business managers, accountants and financial advisors [who deliver similar services to other] high net worth individuals under similar circumstances in similar communities” (paragraph #99 of Depp Complaint).

The Argument: Clearly, it is far too early to pass judgment on the claims or counterclaims of either party. But Mr. Depp’s complaint does provide the road map that will be used to argue that a business manager owes a fiduciary duty of care to their clients. Depp proposes three legal theories: Professional Care (paragraph #99), Fiduciary Duties of an Agent/Delegatee (paragraph #106) and finally, Fiduciary Duties of a Trustee (paragraph #113).

The Solution: A well-designed governance process, whether for really wealthy A-list entertainers or clients of more modest size, will include the following elements:

  • Clear definition of the investment objectives including (a) the projected annual contributions and distributions of the portfolio, (b) the targeted return for the portfolio net of all fees, and (c) the desired terminal value of the portfolio.
  • Documentation of the capital owner’s unique investment principles which inform the manager’s implementation strategy.
  • The availability of monthly performance data consistent with best-practice standards from which the portfolio’s actual return and risk characteristics can be calculated.
  • A written fee agreement with the investment manager that is consistent with industry norms for a portfolio of comparable size and complexity.
  • A written declaration by the investment manager acknowledging the standard of care they owe the client (fiduciary standard or suitability standard) and any conflicts of interest that may exist between the manager and client.
  • A series of blended benchmarks with comparable risk and return characteristics against which to compare the portfolio.


Josh Yager, Esq., CFP®, ChFC®


Anodos helps individual trustees save time, reduce their personal risk, and fulfill their fiduciary duties. We do this by helping trustees develop and maintain a series of governance documents which demonstrates they have fulfilled each of their duties of care. We also will act as an expert witness to defend our clients’ findings in court. What makes us unique is that trustee governance support is all we do. We do not manage money, sell insurance, or accept referral fees. We don't have a horse in the race.

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We help trustees save time, reduce risk, and fulfill their fiduciary duties. What makes us unique is that trustee governance support is all we do.