Annie Leibovitz Facing Lender Lawsuit
At Capital has physical custody of the negatives but the company is after a bigger prize, the intellectual property rights to Leibovitz's portfolio. In order to broker that sort of sale they need Leibovitz's cooperation. Meanwhile, Leibovitz made an agreement with Getty Images in March to work under a "a special multi-assignment collaboration." This deal, done without Art Capital's knowledge, cut them out of getting commission on the photos. The suit doesn't mention any payments that Leibovitz has made to Art Capital against the loan but it is unlikely that she has paid much of it off and as the Gawker article mentions Leibovitz's only out may be to declare bankruptcy. One of Gawker's commenters also makes the point that with the magazine business shrinking and the budget for lavish photo shoots on the wane, Leibovitz's opportunities to make money may be diminished.
Art Capital is in the business of making money off art and sometimes, artists. The company issues loans of $500,000 or more at interest rates from six percent to 16 percent to those who have artwork worthy of making such a loan. It operates like a pawn shop; if you fail to pay and you lose your precious art. Case in point, a Rubens hanging in the Art Capital offices once belonged to Veronica Hearst, the widow of Randolph Apperson Hearst. She mortgaged her art to hold onto Villa Venezio in Manalapan, Florida. She eventually lost the home in foreclosure. Artist Julian Schnabel sued Art Capital this year. He took out an $8 million loan in 2006, when he was building his pink folly known as Palazzo Chupi. Schnabel claims he paid back the loan but Art Capital says it is entitled to more money because Schnabel did not reveal there was an existing mortgage on the property. An ArtInfo article on that suit quotes Gerald Peters, a Santa Fe-based dealer who has bought paintings from Art Capital and says that "the game they have to play is rough, but the service they are providing is real. And there's demand for it."