By Jen Heger - Breaking Celebrity News Assistant Managing Editor

As jury selection continues in Sam Lutfi's explosive lawsuit against Britney Spears and her parents, Breaking Celebrity News has exclusively learned that The X-Factor judge was going broke during the time Lutfi was in her life as her so-called "manager," Breaking Celebrity News has exclusively learned.

"Britney was hemorraghing money at the time when Sam Lutfi was in her life and acting as her manager. Her estimated net worth in 2007-2008 was $32 million dollars. However, she was spending about a whopping $700k a month," a source close to the situation tells Breaking Celebrity News.

"Britney also had huge legal bills because she was fighting her ex-husband, Kevin Federline, for custody of their two sons. She probably paid around $2 million dollars in attorneys' fees to her family law attorneys in just a year and a half, and remember, she ended up losing custody of the boys to Kevin. Britney also leased several very high priced rental mansions in Malibu, including one house that she only spent three nights in! Britney also went on insane shopping sprees and bought a number of luxury vehicles. Britney wasn't working during that time and didn't have a source of new income coming in. At the rate she was spending money when Sam was in her life, had it continued without her dad getting conservatorship, she would have been broke," the insider added.

As Breaking Celebrity News previously reported, Lutfi is suing Britney and her parents, Lynne and Jamie Spears, for breach of contract, libel and defamation for comments Lynne made in a book about her life. The trial is expected to last nearly three weeks, with Lutfi, Lynne, Jamie and Brit's fiance, Jason Trawick, all scheduled to testify.

According to court docs recently filed in Brit's conservatorship, as of