Annie Leibovitz finds new partner for art capital $24 million loan

Annie Leibovitz finds new partner for art capital $24 million loan_Late last summer, Richard Nanula, a principal at private-equity firm Colony Capital LLC, met celebrity photographer Annie Leibovitz in New York as she was struggling to repay a $24 million loan.

Nanula told Leibovitz that the Los Angeles-based firm, which is owned by billionaire Thomas J. Barrack, had some ideas about resolving her problems.

“I said, ‘We helped Michael Jackson. We’d be happy to explore something with you. We are OK with complicated stuff,’” Nanula said in a telephone interview.

On March 8, Colony settled Leibovitz’s debt with her creditor, Art Capital Group, and announced “a new partnership” with the photographer, Nanula said. Colony, Leibovitz and Art Capital all declined to give details of the new contract.

“Colony is in the business of making money,” said Robin Russell, a lawyer at Andrews Kurth LLP specializing in bankruptcy, including private-equity transactions (her firm isn’t involved in the Leibovitz case). “They’ve got to structure it in a way that they are compensated.”

The meeting last year and the recent deal are the latest wrinkles in a case -- with its huge debt and precious collateral -- as stark and compelling as one of Leibovitz’s famous shots: a naked, pregnant Demi Moore or a fetally curled John Lennon with Yoko Ono just hours before his death.

The Colony contract, like her old loan, will be collateralized by Leibovitz’s archive of about 100,000 images and 1 million negatives as well as her three brownstones in Manhattan. Unlike the old loan, it doesn’t include her 228-acre Rhinebeck, New York, estate.

‘An Opportunity’

“We think it’s an opportunity for her and, to some extent, for us,” Nanula said. “She’s got valuable real estate and an incredibly valuable catalogue. We want to get her liquid again and focused on her business. We want her to continue taking her pictures. We believe in her future.”

Colony might have structured the agreement so that it gets a cut of the proceeds from the sale of her existing photos, Russell said. It could be giving Leibovitz the funds to create more products and share in the revenue generated from their sale, she said.

Prices for Leibovitz’s individual photographs range from $8,500 to $50,000, according to her art dealer, James Danziger.

Three months ago Leibovitz released 10 “Master” sets comprising 157 images, each 40-by-60 inches. Seven of these sets had to be sold as single artwork; three could be broken up. A number of complete sets have been sold, priced at “several million dollars” each, said Danziger, declining to specify. Individual “Master”-size images range from $25,000 to $50,000.

Art Capital Suit

Leibovitz’s financial troubles came to light in July when Art Capital sued her, alleging that she refused to cooperate in the sale of her real estate and the copyrights to her photographs. In September, Leibovitz paid Art Capital an unspecified amount to regain control of her archive and property. In return, the firm extended the loan and dropped the lawsuit.

About the same time, Leibovitz decided to pursue things with Colony, Nanula said. Under the new Colony arrangement, he said the private-equity firm won’t interfere in Leibovitz’s artistic decisions.

“If there needs to be capital, we have capital. If she needs advice, we are going to be her sounding board,” Nanula said. “We are not calling the shots on the creative side.”

The partnership with Colony “seems like the solution everyone was hoping for,” Danziger said, in an interview at his Chelsea gallery, Danziger Projects.

Leibovitz’s debt is not huge by private-equity standards, yet it’s “a significant investment to make in an individual,” said Russell. Leibovitz will face pressure to generate income and market her photography, she said.

“The taxi meter is on,” she said, “and the interest is accruing.”

source: bloomberg