Aug. 5 (Bloomberg) -- Celebrity photographer Annie Leibovitz may be better off declaring bankruptcy than battling a creditor suing her for breaching a contract related to a $24 million loan, bankruptcy experts said.

Art Capital Group, a New York-based company that makes loans using art as collateral, extended Leibovitz $22 million in September 2008 backed by the rights to her photographs and real estate in Manhattan and Rhinebeck, New York, court papers said. Three months later, she got $2 million more, according to a suit filed last week in New York State Supreme Court in Manhattan.

The financing company sued Leibovitz, alleging she refused to cooperate in the sale of the copyrights to her photographs and won’t give real-estate agents access to her properties for sale. Leibovitz has to repay the loan with interest and other expenses by Sept. 8, according to the suit.

While losing the case may result in Leibovitz’s financial ruin, a bankruptcy court filing “may be more attuned to fairness issues with regard to her and to all her creditors,” said Thomas Kline, a partner at the Washington office of Andrews Kurth LLP who specializes in art law and litigation. Although bankruptcy would make public Leibovitz’s finances, Kline said, it would place them under the protection of a federal judge.

Considering Options

Filing for bankruptcy “will automatically postpone all litigation against her” while she considers her options, said Kline, who isn’t involved in the case. Such a move would help her “get a handle on her affairs.”

Matthew Hiltzik, a spokesman for Leibovitz, declined to comment. Starr & Co., listed in the complaint as Leibovitz’s financial adviser, didn’t return calls seeking comment.

Leibovitz, 59, is the creator of famous photographs, including a nude of John Lennon in a fetal position with Yoko Ono, and a portrait of a pregnant, naked Demi Moore published on the cover of Vanity Fair magazine.

The photographer was in a “dire financial condition” arising from tax liens, mortgages and unpaid bills, according to the complaint by Art Capital.

An agreement Leibovitz signed with the company makes the firm an “irrevocable, exclusive agent” for the sale of her works and property for the loan’s length and for two years after she pays it off, according to the complaint.

“She went to the lender of last resort,” said Asher Edelman, an art dealer who recently started an art-financing company, Art Assure Ltd.

Cash Flow

“People go to them in desperation” because there aren’t many places that lend against art, he said. “The big banks lend to their clients against cash flow. You need an access cash flow of about $4 million to support a $24 million loan.”

Art Capital’s spokesman, Montieth Illingworth, said that “Art Capital was uniquely qualified to do this financial restructuring and to maximize the value of her estate in order for her to pay the loan and realize the significant gain beyond that amount to stabilize her financial life.”

In 2007 and 2008, Leibovitz was late in paying $1.8 million in federal taxes, according to liens filed with New York City’s Finance Department.

Renovations of Leibovitz’s two buildings on Greenwich Street in Manhattan’s West Village were also mired in litigation and opposition by the Greenwich Village Society for Historic Preservation, according to its director.

The group complained of dangerous and illegal work on the landmark properties, built in the 1830s.

“Progress on the repair work was painfully slow,” said Andrew Berman, the group’s executive director.

Managing Finances

A neighbor of Leibovitz filed a $15 million lawsuit against her, claiming workers damaged a common wall between their two properties, forcing its owners to evacuate. Leibovitz settled the case by purchasing the neighbor’s property for $1.9 million in 2003, Berman said.

Creative people often have difficulties managing their finances, said Brad Klontz, a financial psychologist and author of “Mind over Money: Overcoming the Money Disorders That Threaten Our Financial Health” to be published in December by Broadway Business Books, an imprint of Crown Publishing.

“People who have become successful based on their creativity versus attention to detail may neglect financial planning, coming up with the budget, tracking expenses,” he said.

The photographer’s success may have also contributed to her financial problems, Klontz added.

Always Enough

“Highly successful individuals are more susceptible to a belief that there will always be enough money,” he said. “They are willing to take exceptional risks and believe that everything will work out.”

Leibovitz’s financial situation is unrelated to the estate of her longtime partner, Susan Sontag. The writer, who died on Dec. 28, 2004, didn’t leave an inheritance or property to Leibovitz that required her to pay taxes, according to Sontag’s will, filed in probate in New York.

Sontag, whose estate was valued between $500,000 and $3 million, left “from one to a maximum of four items” of personal property to Leibovitz, according to the will.

Personal Issues

Additionally, personal issues may have increased Leibovitz’s debt load. Eight years ago, Leibovitz gave birth to her first child, Sarah. She also has twins, Susan and Samuelle, who were born to a surrogate in 2005, according to a biography of Leibovitz on PBS’s Web site for its American Masters program.

The entire surrogacy process, including medical procedures, insurance and legal fees, can total $100,000 to $125,000, according to Sanford Benardo, president of the Northeast Assisted Fertility Group, a surrogacy and egg-donation program. A surrogate mother’s fee of $25,000 to $30,000 is part of that sum, he said.

Prices for an egg donor cycle that includes in vitro fertilization range from $20,000 to $30,000, said Barbara Collura, executive director of Resolve, the national infertility association.

Whatever legal strategy the photographer chooses to address the Art Capital lawsuit will be costly, Kline said.

“She doesn’t have a free way home,” he said.

The case is Art Capital Group Inc. v. Leibovitz, 09-602334, New York State Supreme Court, New York County (Manhattan).

Cheers,
Wuudy

$24 million? what on earth can a person need such a loan for? for a company, ok...but man, she gotta be bad with money :O

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Lorenz
$24 million? what on earth can a person need such a loan for? for a company, ok...but man, she gotta be bad with money :O

Probably a settlement with the Tax administration. I am told they are quite nasty in the US.

C

Another self-indulgent creep who absolutely terrorized her neighbors with years of construction. So bad that they had to move. What goes around...

All the best to Leibovitz, she must be bad with money indeed. Somehow this reminds me of an english musician I have heard of, I think his first name is Ronnie. When he is on tour he earns millions, but he managed to loose all of his money several times.

Nah, Ronnie is a nice guy, she is nasty and deserves it

She is a great photographer though.

lucky she doesn't shoot her own face though

[www.walletpop.com]

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mickscarey
lucky she doesn't shoot her own face though

Ouch!

LOL...nasty, but funny.

Ouch. That picture made me JUMP!!!

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windmelody
She is a great photographer though.

I disagree. I know I am in a minority but I have never seen one image she has produced that a three year old w/an Instamatic couldn't do. Ethan Russell,Ken Regan, Michael Putland, yes. Annie... newp.

Agreed.

Agreed.

THE AUSTRALIAN - 7 september 2009



ROCKMAN

If it's a loan, and the art is security, she should file for bankruptcy court protection. The arts will be sold in a carefully structured process, the lender will be repaid, and the remainder will go back to her.

If anyone hears about an auction, where some of her originals of the Stones - Keith in particular - are on sale (Sheik shots are my favourites.), please, please inform us here on the board! I'm trying to build up a collection of Stones photos by people like Philip Townsend, Dominic Tarlé, Bill Wyman, Annie etc.
And I live kind of off Broadway, closer to the North Pole than to the Hamptons and Manhattan. Any tip off would be highly appreciated.
The plan, if I can pull it off, is to have a photo exhibition to celebrate their 50th aniversary in July 2012. (I'm working with a museum on this one, so it's not entirely my money - and therefore the Liebowitz photos are not totally out of reach.)

It just ain't Annie's day:

Annie Leibovitz faces lawsuit from fellow photographer
Last Updated: Sunday, September 6, 2009 | 10:50 AM ET Comments8Recommend8
CBC News
The bad news continues to pile on celebrity photographer Annie Leibovitz, who now faces a lawsuit by an Italian photographer claiming she used his shots without permission.

Leibovitz is already facing massive debt and a default on a major loan which could see the loss of her entire picture collection as well as three homes. Now, she faces another legal dispute.Annie Leibovitz, standing next to her portrait of the queen in 2007, also faces a lawsuit because she defaulted on a $24-million US loan. (Jacquelyn Martin/Associated Press)

Paolo Pizzetti is seeking a court order to stop pictures, which he alleges he took, from being used and wants $300,000 US for copyright infringement in addition to having the photos destroyed, according to BBC News.

He says Leibovitz used photos that he had taken in Rome and Venice and passed them off as her own for a coffee company's 2009 calendar.

A spokesperson for the New York City-based photographer had no comment on the matter.

Pizzetti filed the lawsuit in New York federal court this week.

In those papers, he says the 59-year-old photographer — whose shots of celebrities often grace the covers and pages of Vanity Fair magazine — had hired him to scout locales in Italy for Lavazza coffee in April 2008.

He took photographs, including ones of the famous Plaza San Marco in Venice and the Trevi Fountain in Rome, and sent the images digitally to her. He was then told later that Leibovitz would not be visiting Italy at all.

Models superimposed on photos

When the calendar was released in October of 2008, Pizzetti says he could see that two of his shots had been used with models superimposed on the photos.

According to the complaint, Pizzetti says he noticed the "same bird in the upper left portion" of the image of the Plaza San Marco.

He says Leibovitz never sought his permission to use the photos for the calendar.

The suit is the latest financial woe to hit Leibovitz, who is also being sued for defaulting on a $24-million US loan that is secured against rights to her collection.

Art Capital Group, a New York company that issues short-term loans against fine arts and real estate, sued her in late July for breach of contract.

Leibovitz has also put up three of her homes in New York state as collateral.

re: "Creative people often have difficulties managing their finances, said Brad Klontz, a financial psychologist and author of “Mind over Money: Overcoming the Money Disorders That Threaten Our Financial Health” to be published in December by Broadway Business Books, an imprint of Crown Publishing.

“People who have become successful based on their creativity versus attention to detail may neglect financial planning, coming up with the budget, tracking expenses,” he said.

The photographer’s success may have also contributed to her financial problems, Klontz added.

Always Enough

“Highly successful individuals are more susceptible to a belief that there will always be enough money,” he said. “They are willing to take exceptional risks and believe that everything will work out.”

From what I've seen and read about Leibovitz ...i'd guess it would a combination of both (lack of detail & "always enough").

I'm sure she is very detail oriented when it comes to her photography...most good photographers are but...Leibovitz's
approach to her art has changed. She used to be a great Portrait/Journalist and now everything is over produced by
a team of people that oversee the details. She's WAY too dependent on post-production (photoshop etc...) and in my
opinion has become unfocused (pun intended) and a bit narcissistic (remember the incident with the Queen?).

I'm sure there was a period for her when MONEY WAS NO OBJECT....apparently that is not
the case anymore and her accountant forgot to tell her.


IORR............but I like it!

Annie Leibovitz retains copyright to her photos .

[www.capecodonline.com]

If she's so broke, how'd she manage a front row ticket to the US Open the other night? She seems to be just another celebrity getting away with what regular people dare not try.

I don't think she needs so many houses. She was doing things that required a ton of money to be done - without the income - so she got a loan to cover that. Living beyond her means. Very bad managing of her monies. How is she gonna pay the loan back if she couldn't pay for what the loan paid? Really really bad. Like Ronnie indeed.

Aren't her and Mick rather close? Can't she just borrow the money from him? Ha ha ha ha. Not like he'd notice it gone.



Edited 1 time(s). Last edit at 2009-09-12 02:11 by skipstone.

Glencar, come to think of it, the Stones are celebrities but let's just hope they're not getting away with what regular people dare not try - WOW, Spooky thoughts all around indeed..... Quick Glencar, first Stones Tour? 1989 or 1981 ? Go for it....

Annie should do a nude calendar of all the IORR gals ... it'd sell $$$$ millions



ROCKMAN

Quote
glencar
If she's so broke, how'd she manage a front row ticket to the US Open the other night? She seems to be just another celebrity getting away with what regular people dare not try.

She simply needs to liquidate some of her assets. Bankrupt does not automatically mean poor or penniless.
[www.daveramsey.com]


IORR............but I like it!



Edited 1 time(s). Last edit at 2009-09-12 14:04 by sweet neo con.

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Rockman
Annie should do a nude calendar of all the IORR gals ... it'd sell $$$$ millions

Well you look just great in a frock yourself .... but without it ??? Nah ... I think we'll pass on that one, wouldn't want ta scare off the wildlife in the vicinity of the photo-shoot !

.........Hot pants suit me fine actually



ROCKMAN

Well, she can always have in Instamatic & start from square one. If she remembers how to click the pic button. Or does she have somebody do that for her?

"The wonder of Jimi Hendrix was that he could stand up at all he was so pumped full of drugs." Patsy, Patsy Stone

Melbourne AGE - 13 September 2009



ROCKMAN

Quote
Rockman
Annie should do a nude calendar of all the IORR gals ... it'd sell $$$$ millions

As long as we don't include Canadians.

"It's just some friends of mine and they're busting down the door"