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Was Annie under the influence? Why Leibovitz got herself into this mess
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Annie Leibovitz signed the Sales Agreement with ACG 4X
After this long holiday weekend, one of the most celebrated celebrity photographers of our time, Annie Leibovitz, 59, may be bankrupt.
Next Tuesday, September 8 payment of a $24 million loan from Art Capital Group (ACG) will be due.
Her looming financial ruin and the underlying causes have been widely covered in the media (see Vanity gets the best of Annie Leibovitz), and much of the press has focused on the supposition that ACG is largely at fault due to its history of litigation with (former) clients and purported predatory lending practices.
Here, Examiner offers our readers an exclusive inside look at a few of the facts related to the situation between Leibovitz and ACG, so that you might decide for yourself.
According to court documents attained from ACG spokesman, Montieth Illingworth, in Exhibit A of the complaint filed on July 29, 2009, it shows in plain and simple terms that Leibowitz authorized ACG and its affiliated business, American Photography, LLC to sell Annie’s assets in order to ultimately meet the terms of the loan.
In Paragraph 1 in the section titled Recitals it states:
“Borrower (Leibovitz) hereby irrevocably authorizes the Arranger (ACG) to proceed during the Term and Tail period (as such terms are defined in the Loan Agreement), as Borrower’s exclusive agent, in identifying buyers of the buyers of the Fine Art Collateral and the Real Property Collateral and soliciting offers to purchase the same.”
The term period originally began in or about June 2008 when Leibovitz obtained a $22,000,000 loan from ACG’s affiliate, American Photography (AP). “Several months later, in or about December 2008, Leibovitz requested that the credit facility be increased from $22 million to $24 million and that the interest rate for the loan be reduced by 275 basis points.” As part of the renegotiated loan, Leibovitz “expanded on the right to first refusal set forth in the [initial] secured loan agreement.”
Unless Annie was coerced or under the influence of anything that altered her judgment…it would be difficult to dispute to that Ms. Leibovitzz got herself into this mess.
A right of first refusal ROFR or RFR) is a standard clause in many contracts that guarantees an invested entity such as lender, a publisher, or a record label the option to be the first to be offered the rights to sell something, such as a book, song catalog, art or any other intellectual property rights should the artist or owner decide it wants to sell them and before the artist or owner is entitled to enter into a similar transaction with any other third party.
In sum, ACG argues via the complaint that:
“In the Sales Agreement [see attached photo album], Leibovitz expressly authorized Plaintiff [ACG] to act as Leibovitz’ irrevocable exclusive agent for any sale of fine art and intellectual property owned and created by Ms. Leibovitz and the Leibovitz Entities (the “Fine Art Collateral”) and certain real property (the “Real Property Collateral”) via licensed real estate brokers throughout the term of the loan and for a two-year period after Leibovitz’ obligations under the loan are satisfied (the “Tail Period”).
Unless Annie was coerced or under the influence of anything that altered her judgment, or unless the sales agreement is fraudulent or a forgery, one that was signed by Leibovitz four times (see attached photos), and it would be difficult to dispute to that Ms. Leibovitzz got herself into this mess.
As previously noted, Leibovitz’s personal financial mismanagement and the overextension of her credit line has already been by widely covered by the press.
Thus, it appears, like some of those who find themselves in foreclosure because they overextended themselves through "subprime" and adjustable rate mortgages (ARM), it may very well be that Annie simply didn’t plan very well and relied too heavily on her hubris.
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