Still Life with Snakes

Perhaps it has come to your attention that Annie Leibovitz is having financial troubles. I spent a couple hours looking into this expecting to find a story about predatory lending, but instead I discovered that the art market is, well, totally sleazy!

Leibovitz, apparently suffering from an advanced case of the New York City disease (real estate), had embarked on a renovation project so vast even her substantial income could not cover it.

Enter Art Capital Group, an art financing business run by a former gallery dealer named Ian Peck. Art Capital, basically acting as a glorified pawn shop, made Leibovitz an offer: her life's work, all her houses (she has five) and two years of her time in exchange for $15 million. On the face of it, this sounds like a pretty bad deal - but only if you're entering into it in good faith ...

In December, Art Capital started negotiating to sell the Leibovitz pictures to The Getty. After extended negotiations, The Getty offered $15 million which Art Capital found insultingly insufficient. Then the Getty broke off negotiations and announced it had made a deal directly with Leibovitz. Art Capital sued them both (602334/09 & 601136/09 - NY Cty Court). In late July a New York court denied some of the Getty's motion to dismiss (2009 WL 2440303).

Felix Salmon, who has been following this ado pretty closely, notes Goldman Sachs, which underwrote part of the Leibovitz loan, has become uncomfortable with Art Capital's methods, but isn't it kind of hard to find a hero, or a victim in this story?

In 2005, Art Capital was itself victimized by an employee who was alleged to have, among other things, colluded to fix the auctions at Christies (see ART CAPITAL GROUP LLC v. ROSE ANDREW, 601389/2005). That employee, Andrew Rose, denied any wrongdoing and now runs his own art financing business.