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Debts Closing In on Photographer Annie Leibovitz
Filed at 2:19 a.m. ET
NEW YORK (AP) -- Annie Leibovitz's artsy, provocative portraits of celebrities regularly grace the covers
of Vanity Fair and Vogue, images that have made her as famous as her
subjects and earned her millions.
Now Leibovitz risks losing the
copyright to the images -- and her entire life's work -- if she doesn't
pay back a $24 million loan by Tuesday. Art Capital Group, a New York
company that issues short-term loans against fine and decorative arts
and real estate, sued her in late July for breach of contract.
''We
have clear contractual rights and will protect them in any scenario,''
said ACG spokesman Montieth Illingworth on Friday. ''Our preference is
for this to be resolved.''
Some experts say filing for bankruptcy
reorganization could be the best option for Leibovitz, 59, who has put
up as collateral her three historic Greenwich Village townhouses, an
upstate property and work. She bought two of the townhouses in 2002,
embarking on extensive renovations to combine them into one property.
That spurred protests from historic preservationists and a $15 million
lawsuit by a neighbor.
''Based on the magnitude of her
obligations and the facts as they are publicly known, that would be the
best option,'' said art lawyer Peter Stern.
Leibovitz's images of musicians, presidents and Hollywood glitterati are cultural touchstones. One of her earliest photos is of John Lennon curled up naked in a fetal position with Yoko Ono, taken just hours before he was assassinated in 1980.
So to many, her decision to gamble the rights to her work seems inexplicable. ''Jaw-dropping,'' Stern said.
Her editorial agent, Contact Press Images, has declined to comment on the case, saying it is a private matter.
Her spokesman, Matthew Hiltzik, has accused ACG of harassment.
''There
has been tension and dispute since the beginning ... For now, her
attention remains on her photography and on continuing to organize her
finances,'' Hiltzik said.
A reorganization filing would suspend
all litigation against Leibovitz and place her finances under the
protection of a federal judge, said bankruptcy lawyer Paul Silverman,
who works with Stern. Neither attorney is involved in the case.
Last
year, Leibovitz put up her homes and the copyright to every picture she
has ever taken -- or will take -- as collateral to secure the loan to
pay off her mounting debt: unpaid bills, mortgage payments and tax
liens, ACG said.
While no one has suggested publicly how
Leibovitz got into such desperate financial straits, the mortgage debt
on all her properties -- including the townhouses in Greenwich Village
and a sprawling estate in Rhinebeck, N.Y. -- totaled about $15 million.
This includes the $1.2 million loan she took out on two of the
townhouses, and another $2.2 million three years later, according to
New York magazine.
In addition to her mortgages, court records
show that she piled up years of federal, state and city liens and
judgments from vendors for unpaid bills -- all presumably now satisfied
with the $24 million she borrowed. Federal records show that Leibovitz
owed a total of $2.1 million in unpaid taxes for tax years 2004, 2006
and 2007. She also had New York state tax liens of $247,980 for six
years, including $135,915 in 2007. And she owed New York City several
thousand dollars for three years.
In 2008, a design firm that did
work on one of her Greenwich Village properties claimed that she owed
it $51,000. Leibovitz was also accused that year of refusing to pay
$386,000 to a photo stylist during a 2007 shoot Leibovitz did for the
Disney Company in 2007.
Her spokesman, Hiltzik, declined Thursday to discuss her finances.
''Annie is working to resolve the situation so it would be inappropriate to comment,'' Hiltzik said.
Art
Capital Group, which consolidated all her loans in September 2008,
charged in its lawsuit that Leibovitz breached the contract by refusing
to allow real estate experts into her homes to appraise their value and
by blocking ACG from selling her photographs.
ACG has estimated
the value of the Leibovitz portfolio at $40 million; real estate
brokers say her New York properties are worth about $40 million.
Manhattan
luxury real estate broker Leonard Steinberg of Prudential Douglas
Elliman estimated the two Greenwich Village townhouses would be worth
$14 million to $18 million in today's market. Steinberg is not the
broker on the property.
Leibovitz also owned an apartment in Paris, which she bought for her longtime companion, writer and feminist Susan Sontag.
Leibovitz gave birth at the age of 51 to her daughter Sara in 2001, and has twins, who were born to a surrogate in 2005.
ACG,
with art gallery-like offices on Madison Avenue, is in effect a
high-end pawn shop and just like pawn shops, is just as happy to see a
default, according to art and money experts.
Under the sales
agreement with Leibovitz, Illingworth said, the company would get 10
percent commission on the sale of Leibovitz' real estate and 15 percent
on the sale of her portfolio. Leibovitz would get the remainder after
paying off the $24 million loan, interest and other fees, he said. If
she defaults, the company would get a net 12 percent commission, after
paying approximately 13 percent for costs and fees.
Leibovitz, 6
feet tall with long blond tresses, joined Vanity Fair in 1983. Over the
years, her lens has captured the rich and famous: Barack Obama, Queen Elizabeth II and Bruce Springsteen among them. She gave the world its first glimpse of baby Suri, newborn daughter of Hollywood's superstar couple Tom Cruise and Katie Holmes, on the cover of Vanity Fair.
Her
Vanity Fair salary has been reported to be about $2 million, according
to New York magazine. She also has done work for Louis Vuitton and
American Express; she charges $100,000 for private portraits.
A meticulous and demanding artist designated a ''Living Legend'' by the Library of Congress,
Leibovitz makes her photo shoots lavish, sometimes theatrical affairs.
For a portrait of Kristin Dunst as Marie Antoinette, she flew the
actress and a crew to Paris for a shoot at the Versailles. She put Whoopi Goldberg in a bathtub of warm milk. Many of her images are provocative and controversial, including those last year of 15-year-old Miley Cyrus exposing bare shoulders and back, and a portrait of avery pregnant and nude Demi Moore in 1991.
Her
financial problems escalated in 2003, during the renovation of her
Greenwich Village townhouses. A neighbor sued her for $15 million after
a common wall between their buildings was damaged. Leibovitz eventually
settled by buying the neighbor's property for $1.9 million.
Silverman,
a past president of the New York State Bar Association bankruptcy
committee, is not familiar with Leibovitz's case. But he said a
bankruptcy reorganization filing would give her control of what assets
need to be sold and which to keep.
''It would allow her to decide the manner and method of the disposition,'' he said.