The Independent:

In our article, “Annie get your lawyer: Leibovitz sued over $24m loan” [link] (1 August 2009) we quoted an anonymous source who said that Art Capital Group were ‘pretty scary guys, they are predatory lenders’. The article also included a statement from Annie Leibovitz’s publicist that the lawsuit brought by Art Capital Group is part of its continued harassment and attention-getting efforts. We accept that the allegations are false and apologise to Art Capital Group.’

NYMag:

A factual matter regarding the Leibovitz story [link]. Goldman wrote in regard to a loan agreement that Leibovitz entered into with a company called Art Capital that, “Under the terms of the agreement, says a person familiar with the loan, Art Capital could be entitled to up to 22.5 percent of all the proceeds from the sale of any of Leibovitz’s work-even for two years after she’s paid off the loan. And that percentage could increase to close to 50 percent if she were to default.” New York Magazine has since learned that those numbers were erroneous. The actual commission rates on the sale of the collateral underlying the loan are 10 percent on Leibovitz’s real estate and 15 percent on the sale of her work. In the event Leibovitz defaults on the loan, a default commission of 25 percent, and after costs as low as 14 percent, would be realized. New York regrets the error.

It looks like Art Capital has the upper hand both contractually and in the PR campaign. Today Daily Intel’s Jessica Pressler cites Bloomberg’s Katya Kazakina:

The $24 million loan photographer Annie Leibovitz borrowed against her portfolio from Art Capital Group comes due September 8, but a quickie sale of her West Village properties could get her out of her hole.

Quickie sale? Felix Salmon says no way:

It’s not just the sales agreement which gives Art Capital an incentive not to sell the property. There’s the loan agreement, too: Art Capital’s Ian Peck told me in June, talking about his business in general rather than Leibovitz in particular, that his “commissions and fees are designed to be prohibitive” in the event that a borrower defaults on her loan. Come September 8, Art Capital won’t just be collecting a 25% commission on any real or intellectual property it sells on behalf of Annie Leibovitz. The amount which Leibovitz needs to repay Art Capital will also spike significantly: the interest rate on the loan will go up to some unknown penalty rate, from 12%, and Art Capital will almost certainly charge Leibovitz substantial (and also unknown) fees on top for going into default.

What’s more, since Art Capital is now working on a 25% commission, it’s also clear that it has every incentive to sell both the real estate and the intellectual property, rather than the real estate alone, since the best-case scenario for Art Capital involves maximizing its total sales commission.

So how does Leibovitz get out of this mess?

As I see it, she has two hopes. One is that Goldman Sachs, which owns part of the loan, takes pity on her and advances her the money to pay it off in full. The other, as sketched out by John Cook, is that she files for bankruptcy and throws herself on the mercy of a sympathetic bankruptcy judge… there’s a real risk that the bankruptcy strategy would gain her little and just end up diverting precious millions to two (or more) sets of bankruptcy lawyers. But I reckon it might well be her best hope.

For the record, Joe Weisenthal thinks Leibovitz is Not The Victim Of Predatory Lending; she’s smart enough that she should have known better.