MANHATTAN (CN) – Talk about a dire financial picture. An art consultancy claims it helped Annie Leibovitz dig out from a pile of debts with a $24 million loan, on her promise to give it right of first refusal to sell photos from her archive and her West Village apartment, and that Leibovitz took the money and is trying to back out of the deal.
Leibovitz, famed for her iconic photography and Vogue magazine covers, was sued in New York County Court by Art Capital Group, which says the terms of the loans were stated in a sales agreement.
Art Capital says Leibovitz approached it in June 2008, seeking help sorting out her “dire financial condition.” It claims Leibovitz was overwhelmed by “mortgage obligations, tax liens, and unpaid bills to service providers.”
Art Capital says it negotiated a $22 million line of credit through its affiliate, American Photography, in exchange for right of first refusal to the sale of any of her assets. A few months later, Art Capital says, Leibovitz asked that the loan be increased to $24 million with a reduced interest rate.
Art Capital says it agreed, and that Leibovitz “drew down the entirety of the $24 million credit facility.” In return, it says, the photographer agreed to a sales agreement which, throughout the term of the loan and for two years afterward, “expressly authorized the plaintiff to act as Leibovitz’ agent for … every photographic image (she had) ever taken …”
It claims that when she negotiated the first loan, “Leibovitz discussed and acknowledged that Leibovitz’ fine art, intellectual property and real estate assets, all collateral for the loan, would likely need to be sold, in whole or in part, as part of the process of Leibovitz’ financial restructuring.”
The sales agreement also made Art Capital the agency to sell Leibovitz’ Rhinebeck and Manhattan homes, according to the complaint.
But Art Capital says that after having received “the benefits of a reduced interest rate” Leibovitz “and the Leibovitz Entities now seemingly pretend that they do not understand the Sales Agreement and seek to ignore their obligations under it.”
Art Capital says Leibovitz has “blocked the plaintiff’s rights to act as Leibovitz’ exclusive sales agent,” prevented real estate brokers from showing her properties, and has failed to pay Art Capital’s invoices totaling “hundreds of thousands of dollars.” It says the $24 million loan is due on Sept. 8.
Art Capital says Leibovitz’ breach of the sales agreement is “nonsensical,” because the sale of her collateral would enable her to pay off the loan, and make a profit.
Art Capital seeks a declaration that the sales agreement is in full force and effect, and that it has the right to sell Leibovitz’ fine art collateral, and get access to her property. It is represented by William Dahill with Wollmuth Maher.