Vanity gets the best of Annie Leibovitz

August 26, 12:39 AMNY Photography ExaminerLorenzo Dominguez

Previous Next

Comment Print Email RSS Subscribe

Subscribe

Get alerts when there is a new article from the NY Photography Examiner. Read Examiner.com's terms of use.

Email Address   Include other special offers from Examiner.com Terms of Use

Gloria Steinem presenting the 2009 ICP Lifetime Achievement Award to Annie Leibovitz

Perhaps the most famous and celebrated celebrity photographer of her time, Annie Leibovitz, 59, is on the brink of financial ruin.

Best known for her glamorous portraiture of Hollywood stars and starlets created for Vanity Fair magazine, bankruptcy looms for Leibovitz as she struggles to pay a $24 million loan that is due in 15 days and counting, on September 8.

In September of 2008 Leibovitz signed a loan agreement, followed by a sales agreement in December with Art Capital Group (ACG).  According to Forbes the sales agreement was signed "four times" by Leibovitz. In exchange, she agreed to put up the wholesale rights to all her photographs, as well as substantial real estate, as collateral.

Leibovitz not only risks losing her photo archives, which The New York Times values at 50 million dollars, but also her house on West 11th Street in the Greenwich Village district of Manhattan, which is actually made of three Civil War-era townhouses purchased for a total of $6.02 million. A second vacation home, the former Astor compound in Rhinebeck in upstate New York, is also in jeopardy.

Andrew Goldman examines Annie’s woes in this week's issue of New York magazine ("How Could This Happen to Annie Leibovitz?", August 16, 2009) arguing that the cause of Leibovitz's problems are due to a longstanding tendency to be financial irresponsible, a penchant that was reflected in work that often relied on ostentatious and costly sets for her portraits. In 2006, Leibovitz shot of Kirsten Dunst posing as Marie-Antoinette for the September issue of Vogue magazine, the shoot required the closure of France's Palace of Versailles.

Reportedly, she often spent unconscionable amounts of money while on assignment. Goldman states, "Leibovitz's perfectionism led her to pay little or no attention to budget restrictions, and she spent money recklessly, losing cameras, accruing parking tickets, and even abandoning rental cars."

On July 31 The New York Times reported that “public records show that in the last two years, Ms. Leibovitz has faced tax liens of $1.4 million and two lawsuits claiming that she has not paid more than $700,000 in bills for photography services.” And Forbes also recently noted that “last May, B2Pro Lighting, whom she owed just under $200,000, threatened to file a petition to force Leibovitz into bankruptcy because of her outstanding debt,” but no petition has yet been filed.

However, the same Times article disputes Goldman’s contention stating “friends and colleagues agree that it is not a taste for luxuries that has caused Ms. Leibovitz’s financial difficulties. Although well known for extravagant spending while on assignment, those expenses are paid by her employers. ’Annie is not an expensive liver herself,’” said Tina Brown, former editor of Vanity Fair. “She hangs out with her kids. She doesn’t hang out in the lights at the parties.”

That said, Goldman details her reckless real estate investments as follows: 

"In 2004, still in need of money to help pay for the $1.87 million purchase of the damaged Greenwich Village house, Leibovitz took out a bridge loan, a short-term, typically high-interest financial instrument. The loan was intended to tide her over until she could sell her other properties. Later that year, she sold the 26th Street studio for almost $11.4 million; in 2005, she sold the London Terrace penthouse. Those sales must have generated millions in profit, but they still didn’t get her out of the red. Leibovitz, like so many Americans during the boom years, had been taking out additional mortgages, heaping loan upon loan. Before selling her photo studio, she’d borrowed an additional $3.5 million against it, above the original $2.1 million mortgage. The initial mortgage on the Rhinebeck property was about $1.8 million. Eventually, she had some $11 million mortgaged against it. She’d bought the Greenwich Village property with a $1.2 million loan, and three years later tacked on an addition $2.2 million mortgage. By last year, the total value of the mortgages she was carrying came to about $15 million. Assuming she had a 5 percent 30-year fixed-rate mortgage on that amount, her annual outlay just to service the debt on those loans would have come to almost $1 million." 

What makes the looming disaster even more tragic for Leibovitz is that just four months ago she was honored with the coveted Lifetime Achievement Award from the International Center of Photography. 

Graydon Carter, the current editor of Vanity Fair, who participated as a presenter at the awards show was also quoted by The Times stating, “The mind that can take these extraordinary pictures is not necessarily the same mind that is a perfect money manager.”

Apparently, the ACG agrees, because despite her extraordinary credentials as an artist, her creditors have pledged no mercy and have taken action to reinforce her commitment to give up all the rights to her work, should she be unable to make good on the loan repayment. 

According to the New York Times, on July 29 ACG filed the breach of the sales agreement suit, demanding access to her homes in order to begin selling them, claiming that Leibovitz was already in arrears “for hundreds of thousands of dollars in unpaid fees associated with the loans.”  According to ACG spokesman, Montieth Illingworth, "ACG was authorized by Annie Leibovitz to sell her real estate and fine art even before the loan came due on Sept 8, 2009."

And in April, ACG also sued Getty Images for commissioning Ms. Leibovitz, contending that the deal would devalue the pending sale of her portfolio. 

In addition, Illingworth, stated Leibovitz must "comply with the sales agreement she signed authorizing Art Capital to sell the fine art and real estate assets and to pay the invoices that are due."

Without sales of collateral, Art Capital argues that “Leibovitz will be unable to satisfy their obligations on the maturity date—a point that was discussed and acknowledged by the parties at the outset of the restructuring.” 

It was also reported in a July 30 Times article that in response to ACG’s onslaught of litigation, Ms. Leibovitz’s spokesman, Matthew Hiltzik, stated “This is part of Art Capital’s continued harassment and attention-getting efforts. There has been tension and dispute since the beginning. Annie is in the same shoes as many other people involved with Art Capital.”