The New York State Supreme Court Justice Bernard Fried has extended the deadline to October 1, 2009 for A. Leibovitz to respond the Art Capital lawsuit for $24 million dollars.

A Wednesday September 2, 2009 ruling has become widely available as of today September 4, 2009. The original lawsuit seeks a response and finding concerning the money loaned to Leibovitz on collateral including her personal property and professional work output. This delay gives her more time to organize her actions in an increasingly complicated chain of events.

Annie Leibovitz still faces the possibility of bankruptcy.The estimated value of her assets, including property, far exceed the amount of the loan. However, the assets are not easily liquidated and there are contractual issues that need resolution. Who has the ultimate right to sell any or all of her properties is one question as well as whether future work belongs to the Art Capital group and if they are acting as a passive manager or agent. Forced or short sale of Real Estate holdings might cover the principle amount of the loan. Her studios value includes worth as they are configured and buyers might not share the same needs and be required to remodel. That could substantially reduce the value.

Other concerns facing A.L. include interest, penalties, and commissions on an increasing sliding scale. Reports indicate that the amount of the added costs have already climbed into the 10's of millions of dollars. Additional litigation and defense bills from both sides legal counsels are also growing. Then there are counter suits, and third parties including Getty Images who may have interfered, Goldman Sachs who has an interest in some portion of the loan, and others including past clients who may wonder about reprint, reuse, and stock rights from various Leibovitz work.

A formal loan default filing by Art Capital, though permissible as part of the contract culminating originally on September 8, may not be the best strategic move. That would certainly force A.L. into bankruptcy protection either by her choice or involuntarily by the courts. Either way it would slow down any conclusion.

Will there be a settlement? That remains to be seen and the next move is still A.L.'s.

At least for thirty days . . . Stay tuned.


Comments and thoughts continue to be welcome!