The young singer and actress spent time in a rehabilitation centre in 2010 to treat issues that included bipolar disorder, self-harming and an eating disorder.
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Lovato recently began a stint as a judge on The X Factor USA's second season, and Cowell revealed he specifically targeted her because of her 'Disney star-gone-bad' background.
The music mogul told Young Hollywood: "I like the fact, with Demi, that she was this sort of Disney product who went bad, and knows that she went bad.
"[She] sorted herself out [and] came through the other side stronger than ever.
"I found her interesting, and I think we've got her at absolutely the right time."
The X Factor USA latest pictures:
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