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Thread: Latest in the Leibovitz saga

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    Latest in the Leibovitz saga

    NEW YORK (Reuters) - An art finance company that lent celebrity photographer Annie Leibovitz $24 million against the value of her entire collection and her properties has sued her for violating the terms of the agreement.

    In a lawsuit filed in New York State Supreme Court on Wednesday, Art Capital Group Inc asked a judge to compel Leibovitz to cooperate with the person assigned to sell her copyrights and organize the sale of her properties, so Leibovitz can pay back the loan.

    In a statement, a spokesman for Leibovitz called the allegations "false and untrue."

    The lawsuit said Leibovitz, 59, who has photographed everyone from Michelle Obama to Britain's Queen Elizabeth and a very pregnant Demi Moore in the nude, approached Art Capital in June 2008 about her "dire financial condition."

    She initially obtained a $22 million loan from American Photography, which is held by Art Capital Group. Later that amount was increased to $24 million.

    The breach of contract lawsuit accuses Leibovitz of "boldly deceptive conduct" and seeks to compel her to grant real estate agents access to homes in Manhattan and in Rhinebeck, New York, so they can be sold and the money used to repay the loan.

    "In connection with the negotiation of this $22 million credit facility, Leibovitz discussed and acknowledged that Leibovitz's fine art, intellectual property and real estate assets, all collateral for the loan, would likely need to be sold ... as part of the process of Leibovitz's financial restructuring," the lawsuit said.

    Since then, Leibovitz has refused to meet with parties interested in buying her collection of photographs and has refused access to her properties, in breach of her contract with Art Capital, the lawsuit said.

    Leibovitz's spokesman said the lawsuit "is part of Art Capital's continued harassment and attention-getting efforts."

    "There has been tension and dispute since the beginning," the statement said. "For now, her attention remains on her photography and on continuing to organize her finances."

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    Subscriber Member Jorgen Udvang's Avatar
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    Re: Latest in the Leibovitz saga

    Think, think, think... trying to figure out how I could spend $24 million on camera gear. A couple of S2 bodies and all the lenses, that's around $100,000, isn't it? Now, what to do with the remaining $23.9 million

    This sounds rather tragic to me

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    Re: Latest in the Leibovitz saga

    Quote Originally Posted by Jorgen Udvang View Post
    Think, think, think... trying to figure out how I could spend $24 million on camera gear. A couple of S2 bodies and all the lenses, that's around $100,000, isn't it? Now, what to do with the remaining $23.9 million

    This sounds rather tragic to me

    I believe that part of it was real estate that declined in value.

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    Re: Latest in the Leibovitz saga

    Quote Originally Posted by Mark_Tuttle View Post


    Leibovitz's spokesman said the lawsuit "is part of Art Capital's continued harassment and attention-getting efforts."
    Yeah, right.


    Sorry to read she is having $ problems. Read that it started when she inherited her partner's estate. Don't know if any of the $ problems are actually of her own doing.

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    Re: Latest in the Leibovitz saga

    from PDN:

    Who is Art Capital?

    ....To find out, let's start at the obvious place, Art Capital Group's Web site, which tells us the company is based in New York City and specializes in offering loans to people who own fine art. "Unlike traditional sources of capital, we are comfortable utilizing fine and decorative art as the sole asset for securing a loan," the site says. In the case of Leibovitz, they loaned her money against multiple assets including fine art (think: prints), intellectual property (think: negatives), and real estate. A Businessweek profile notes that the company was founded in 1999 and used to be called Fine Art Lease.

    Earlier this year Art Market Monitor published an interview with Art Capital Group founder and CEO Ian Peck, in which he said a typical loan from his company is for 18 months. "We’re still aggressively lending. But our risk levels have gone up; so our rates have gone up," he said.

    Last February, The New York Times published a story about Art Capital Group and other art-related loan business like it. As the credit crisis worsened, these companies saw their business jump. In 2009, Art Capital Group expected to make $120 million in art-related loans—a pittance in the financial services world, but a big number when you talk about art. The Times described these companies as like "pawn shops," noting that they often take possession of the art they've made a loan against. (The Leibovitz lawsuit doesn't say if Art Capital Group has physical possession of any of Leibovitz's property.)

    As Gawker noted today, Art Capital Group also claimed the right to act as Leibovitz's agent. In March, Getty Images announced a deal to represent Leibovitz on certain special assignments. A month after that announcement, Art Capital Group filed a request for judicial intervention against Getty Images. (Document here.) The request, which has not been previously reported, was filed in New York State Supreme Court, New York County. Specific details about the request aren't in the file, but if Leibovitz's partnership with Getty has born any fruit, both sides have been very quiet about it. Leibovitz also has long-standing relationships with two other agencies, Art + Commerce and Contact Press Images.

    from PDN's publicly available website.
    Last edited by fultonpics; 30th July 2009 at 22:47.

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    Deceased, but remembered fondly here... johnastovall's Avatar
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    Re: Latest in the Leibovitz saga

    Annie Leibowitz did not bring this on herself. It was brought about by a tax system which failed to recognize her inheritance from Susan Sonatag.

    Annie Leibovitz and the gay tax

    Annie Leibovitz is in a jam

    "The market wants a Leica to be a Leica: the inheritor of tradition, the subject of lore, and indisputably a mark of status to own."
    Mike Johnston


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    Re: Latest in the Leibovitz saga

    John,

    I don't think we can say what brought on AL's problems, but I doubt it was wholly caused by the estate tax. When Susan Sontag died, in 2004, the estate tax exemption was $1.5 million. Amounts over $1.5 million were taxed at up to 55%. For AL to be in debt $24 million solely due to estate taxes, she'd have had to inherit about $40 million worth of property and chosen to keep it all rather than sell a portion to pay the tax.

    Good news for Michael Jackson's heirs: the exemption is now $3.5 million, and the rate is lower.

    Steve

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    Re: Latest in the Leibovitz saga

    Quote Originally Posted by johnastovall View Post
    Annie Leibowitz did not bring this on herself. It was brought about by a tax system which failed to recognize her inheritance from Susan Sonatag. [sic]
    Borrowing $24 million and then not making the repayments didn't possibly have a teeny, tiny bit to do with it...?

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    Re: Latest in the Leibovitz saga

    Quote Originally Posted by Mark_Tuttle View Post
    In a statement, a spokesman for Leibovitz called the allegations "false and untrue."
    Falsehoods are bad enough, but untrue falsehoods are the worst kind, don't you think?

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    Re: Latest in the Leibovitz saga

    Quote Originally Posted by Ranger 9 View Post
    Falsehoods are bad enough, but untrue falsehoods are the worst kind, don't you think?
    Indubitably.

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    Re: Latest in the Leibovitz saga


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    Re: Latest in the Leibovitz saga

    Just to muddy the waters, was her lawsuit from her employers and the rental companies demanding a huge amount of backpay ever settled? If it was true and it sounded true, I have no pity whatsoever...
    I am not a painter, nor an artist. Therefore I can see straight, and that may be my undoing. - Alfred Stieglitz

    Website: http://www.timelessjewishart.com

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    Re: Latest in the Leibovitz saga

    Ben - read the NY Times article, some information there. Also, the Times reports that according to Sontag's son, Leibowitz did not receive a large inheritance so the real estate tax issue may be just internet blog speculation.

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    Re: Latest in the Leibovitz saga

    Remember all of Sontag's family did not get along with Annie. As someone who recently lost my wife stepchildren always look for someone to blame when a loss happens. Maybe Sontag's son is being honest but maybe not. David

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    Re: Latest in the Leibovitz saga

    The entire issue still seems clouded in lots of unknowns. Not knowing all the details, and we never will, having a $24 million note does seem really over the top. All of her properties are not even totaling that much, plus she is still pulling down some nice coin. Seems like there is a lot more than just poor money management going on here. Honestly, one of the best expenditures she could have made was hiring a trusted money manager/accountant and listening to the analysis and advice. Then, if her creative penchant when way out of bounds from that advice, ask the money person to figure out a way and create a discipline to help her get there. However, finding that trusted person is not an easy or sure thing anymore. Hoping this all gets righted, and it does shed some more light on operations like Art Capital, which seems to have its own greedy agenda and questionable practices at work. Trying not to be judgmental on that, but the picture painted is not flattering.

    LJ

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    Re: Latest in the Leibovitz saga

    I'm sorry, she gives the rights to all her past and future work as security on the loan, she then gives getty rights (a fact) to her pictures which are not hers to sell and suddenly it's the loan company who are the baddies? I would rather think that celebrities living beyond their means, using companies to bail them out for sums so astronomical, should live within the terms of what their contracts are without cheating and then throwing about terms such as 'harassment' which is just pathetic.
    I am not a painter, nor an artist. Therefore I can see straight, and that may be my undoing. - Alfred Stieglitz

    Website: http://www.timelessjewishart.com

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    Re: Latest in the Leibovitz saga

    Ben,
    Understand your perspective and agree. However, the way I read that article, she used the rights of her archive stuff as collateral for the loan. The Getty deal looks like it is for newly commissioned stuff and work that is not presently part of the archive. I could be wrong, but that makes a lot of difference. I did not think she put her future rights at risk. It is also not clear if the Getty deal is "work for hire", and she forgoes those rights to the folks that commission her work or to Getty. As I said, lots of unknowns here. I do think that anybody, celebrity or not, should have several safeguards and lawyers/accountants hired when needed to both explain the deals and help protect the interests of all that money and estate. Unless one is an attorney with specialties in property rights, taxes, and these sorts of deals, everything can be put at risk with ugly consequences. I have no sympathy or pity for those that speculate wildly and lose their money, just as I have none for folks gambling.

    LJ

    P.S. another example of just how muddled, confused, devious and pervasive some of this can be, read that other article and thread about MPix and Millers with their professional services and what you sign over to use and get charged for.

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    Re: Latest in the Leibovitz saga

    From Bloomberg today:

    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).

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    Re: Latest in the Leibovitz saga

    Mark,
    Thanks for the update. Makes for some interesting reading. Still hard to imagine somebody wanting to take out a $24 million note when their financial situation (at least what is presented here) does not look that excessive. The biggest ticket item was the $15 million lawsuit, but those things get negotiated downward, or payments get extended over time to reduce the immediate burden. She must have had a whole lot of unpaid bills to get that deep. Hope this gets worked out some way so that she can get back to being creative and stuff. Not defending her, and not all of her stuff is grand, but she is one of the icons of our photographic generation, and I hope this does not stop that work.

    LJ

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