Margin Call Annie Leibovitz

[drg]

Famed photographer Annie Leibovitz is now less than two weeks away from facing complete financial chaos. September 8 is the date that has emerged as the final date for her to resolve a reported $24 million dollar debt. She is literally facing a margin call situation as if she had wagered on commodities!

This story that appeared on the news horizon in February 2009, (see previous post "Pawning your artwork") took some new twists in July of this year with the debt holder claiming a lack of cooperation from Leibovitz in resolving the loan. see "Leibovitz sued for breach of contract". The New York Times followed up their original story from February in July with an update concerning the fuzzy picture that A.L. was facing.

Now with less than two weeks left, the accusations and counter charges appear to be flying hot and heavy.AFP ( Agence French-Presse) reports "Leibovitz faces ruin" if she cannot satisfy the debt by Tuesday September 8, 2009.

Will she be bailed out by her powerful friends or will a white knight step in and make sense of the financial wreck? Are their other debtors in the wings?

If A.L. should lose any or all of her work, will it have the same value and what of the reported alleged clause in the original deal that may force her to work for the rest of her life for someone else's benefit?

Strange times that hopefully will not end in a sad footnote for Leibovitz.

Your comments welcome. Feel free to add information to this post as it becomes available.

[megan]

I've been (loosely) following this with... horror. It's sobering. We (as photographers and /or artists) need to seriously learn how to manage our business. Some do - and wow, what can happen when one doesn't.

[freygr]

I've been (loosely) following this with... horror. It's sobering. We (as photographers and /or artists) need to seriously learn how to manage our business. Some do - and wow, what can happen when one doesn't.

Megan I have to agree, now days it's not the time to miss manage your business by putting all your assets (including future work) on the line for a loan. What was Annie Leibovitz thinking, a contract is a contract.

[gahspidy]

Its an interesting story and turn of events for her. Seems she never really had a good hand at managing her financial affairs from the start.
I'm wondering if she feels as strongly about her lifes work as we assume she would. By this I mean that perhaps as an artist first she feels the past work has been done and over and she lives for the next shot or opportunity. Whatever happens to her body of work, it will ALWAYS be hers regardless of whether or not she is entitled to earn a dime off it anymore. For her to put it all up as collateral is a very extreme manuever and I'm just trying to understand her mentality.
Anyway, I do hope she can come out of this without losing it all, including her creative independance.

[Dave6223]

People are people, regardless of what they do for a living.

I'm sure there are countless people who make huge mistakes in their professional lives. Unfortunately, she is just one of them. It's a shame to see her in this position, and I hope that she can reconstruct her life.

Dave

[drg]

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!

[drg]

An update and clarification post!

Today, September 8, 2009 is still the day the loan A.Liebovitz faces is due. $24 million dollars plus interest and penalties.

My previous post might lead one to believe that the 1 month delay suspends or puts off this debt. Not so.

The delay is for A.L. to respond to a lawsuit from the debt holder, Art Capital Group, that alleges breach of contract regarding their, A.C.G.'s, role as her agent in selling and marketing of work.

Will A.C.G. declare A.L. in default today? That is the question of the day.

A.L. stands to lose the Copyright to all of her photographic work! That and a bunch of high value real estate is on the block.

To add insult to injury, she has been accused by an Italian photographer in the great Lavazza coffee advertisement scandal of theft of photographs or at least something like plagiarism.

Watch for updates and your comments are welcomed about this increasingly sad and to use Megan G's term, horror show.

Stay tuned.

[opus]

cnn.com has an article about it today:
http://www.cnn.com/2009/US/09/08/lei...ebt/index.html

[hollis]

Wow..ACG has her negatives in storage
http://entertainment.timesonline.co....cle6826531.ece

[mjs1973]

Looks like Art Capital Group has dropped it's lawsuit against Leibovitz. They have not dropped their suit against Getty.

More info here.

Leibovits still has other legal battles to fight though. There are at least 5 other separate lawsuits pending against her.

More info here.