Photography Collection

By Katya Kazakina

Annie Leibovitz's deadline to repay her $24 million loan to Art Capital Group passed at midnight, forcing the celebrity photographer’s creditor to decide how tough it must be in pursuing its claim. Montieth Illingworth, spokesman for Art Capital, declined to comment on whether Leibovitz is now in default, or whether new loan terms are being worked out. Goldman Sachs Group Inc., also a creditor for the loan, declined to comment. Leibovitz, known for her photographs of John Lennon and Demi Moore, backed the loan with the copyright to her catalog of images, as well as her three brownstones in Manhattan’s West Village and a 228-acre property in Rhinebeck, New York. “The nature of her commitments to Art Capital is such that they need her cooperation,” said Thomas Kline, a partner in the Washington office of Andrews Kurth LLP who specializes in art law and litigation, and isn’t involved in the case. “If they can’t beat her into cooperating, they may need to entice her.” Declaring Leibovitz in default of the loan, even if she missed her deadline, may not be in Art Capital’s best interest, legal experts said. While a default notice would clear the firm to sell the collateral, the move could also spark a flurry of cross-defaults by other lenders, according to Marc Abrams, head of bankruptcy and restructuring at Willkie Farr & Gallagher LLP in New York. Abrams isn’t involved in the Leibovitz case. At the same time, a default declaration could force the photographer into bankruptcy court. That would postpone all claims against her and place her under the protection of a bankruptcy judge.

“It will give her a breather to try to organize her affairs,” Kline said. “It doesn’t change the thing that she has obligations to pay her debts and fulfill her contractual obligations.” The New York real estate may be worth as much as $40 million, according to real-estate brokers. Her photographs have been valued at more than $50 million by Art Capital, a New York- based lender that accepts art works as collateral. A reprieve from legal battles could be just what Leibovitz needs. On Sept. 4, Italian photographer Paolo Pizzetti sued her in U.S. District Court in New York, alleging she misappropriated photos he took and used them in an advertising campaign for Lavazza, the Italian coffee company. Pizzetti seeks a court order requiring Leibovitz to stop using the images and to pay $150,000 per infringement of his images as well as other unspecified damages, according to the complaint. “No one wants to be the last person suing after all the assets are gone,” Kline said Matthew Hiltzik, a spokesman for Leibovitz, declined to say whether she is planning to pay off her debt or file for bankruptcy protection.