How Could This Happen to Annie Leibovitz?

Photo: John Keatley/Redux

Annie Leibovitz clearly hated what a lifetime-achievement award implied about her—that the best days of her 40-year career were behind her. “Photography is not something you retire from,” the 59-year-old Leibovitz said from the stage, accepting the honor from the International Center of Photography last May at Pier 60. She was turned out in a simple black dress and glasses, her long straight hair a little unruly, as usual. Photographers, she said, “live to a very old age” and “work until the end.” She noted that Lartigue lived to be 92, Steichen 93, and Cartier-Bresson 94. “Irving Penn is going to be 92 next month, and he’s still working.” Then her tone turned rueful. “Seriously, though, this really is a big deal,” she said, hoisting her Infinity Award statuette, her voice quavering to the point where it seemed she might cry. “It means so much to me, you know, especially right now. It’s, it’s a very sweet award to get right now. I’m having some tough times right now, so … ”

The 700 friends and colleagues who had come to share the evening with her knew about the “tough times.” Two vendors had sued her for more than $700,000 in unpaid bills, and in February, the New York Times ran a front-page story reporting that in order to secure a loan, Leibovitz had essentially pawned the copyrights to her entire catalogue of photographs. Even those who had known she was in trouble were shocked by the extent of it. Leibovitz was responsible for some of the world’s most iconic magazine covers—a naked John Lennon with Yoko Ono for Rolling Stone, Demi Moore, naked and pregnant, for Vanity Fair. She had moved from celebrity portraiture to fashion photography to edgier, more artistic pictures; some considered her the heir to Richard Avedon or Helmut Newton.

Despite being a compulsive perfectionist whose shoots cost a fortune to produce, Leibovitz was very much in demand. People spoke of a fabled “contract for life” from Condé Nast, thought to bring her as much as $5 million annually. (The estimate didn’t seem far-fetched; a decade ago, the Times reported that Condé Nast chairman Si Newhouse had instructed Vanity Fair editor Graydon Carter not to “nickel and dime” Leibovitz over the issue of an extra quarter-million dollars in her contract.) She was said to earn a day rate of $250,000 just to set foot in a studio for an advertising job for clients like Louis Vuitton. Over the years, Leibovitz had bought and sold a small fortune in real estate—a penthouse in Chelsea with a photo studio nearby, a sprawling townhouse in Greenwich Village, a compound in Rhinebeck once owned by the Astor family, and a Paris pied-à-terre overlooking the Seine. Virtually anyone (the Queen of England, for instance) would agree to be photographed by her, and she had a longtime relationship with the celebrated writer and intellectual Susan Sontag.

Lately, however, Leibovitz’s life had taken a decidedly dark turn. Her reference to “tough times” was significantly understated. In the past five years, Sontag and both of Leibovitz’s parents have died. Her debts now total a staggering $24 million, consolidated with one lender with whom she is engaged in a lawsuit and due in September. If she can’t meet that deadline, she may lose her homes and the rights to her life’s body of work.

Friends say Leibovitz has begun to think of herself less as a celebrity artist leading a charmed life and more as a single mother of three fighting to keep a roof over her head and food on her family’s table. It isn’t surprising, then, that she bristled at a lifetime-achievement award. The fear of no longer working is terrifying to her. She has to work. What remains mystifying is the simple question on everyone’s mind that night: How on earth could something like this have happened to Annie Leibovitz?

Leibovitz was born in 1949, in Waterbury, Connecticut. Her father, Sam, joined the Air Force after an unsuccessful stint in the fashion business. Her mother, Marilyn, was a dancer who had once performed with Martha Graham. Right after Leibovitz graduated from high school, the family moved to the Philippines. Sam wanted his 17-year-old daughter to stay close by and attend the University of the Philippines. Anna Lou, the name her family still uses to address her, had other ideas. The six-foot-tall girl, seemingly composed of all knees, elbows, and glasses, packed off for the Bay Area, where her sister Susan lived. In 1967, Leibovitz enrolled in the San Francisco Art Institute as a painting major, hoping to eventually teach art. Instead, she fell in love with photography, and in 1970 a boyfriend persuaded her to submit pictures she’d taken for a class—police in riot gear, Allen Ginsberg at a peace rally—to Rolling Stone, then just three years old. It took only three years after that for Jann Wenner to install her on the masthead as “chief photographer” alongside the likes of Hunter S. Thompson.

*In “How Could This Happen to Annie Leibovitz,” by Andrew Goldman (August 24), Goldman made the following statement with regard to a loan agreement that Leibovitz entered into with a company called Art Capital: “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.

Ian Peck (left) and Baird Ryan of Art Capital Group.Photo: Beatrice De Gea/The New York Times/Redux

In keeping with the times, Leibovitz’s early work focused on politics and rock and roll—Nixon’s resignation, Sly Stone. By the late seventies, she had begun to display a lighter, more comic style, like painting the Blues Brothers’ faces blue and posing Bette Midler, star of The Rose, atop a bed of roses. Later, at Vanity Fair and Vogue, she became known for idealized, heroic portraiture. Leibovitz has an uncanny ability “to make boring white men who have desk jobs look epic,” says Graydon Carter. “She shot a photo of me where I looked like I was James Dean or something,” says Quentin Tarantino of his 1994 portrait. “And I’m a guy who doesn’t look like James Dean.” “These pictures are how I will look in heaven,” author Brett Leveridge wrote of a book-jacket photo that Leibovitz shot. Unlike her hero, Avedon, Leibovitz seems unwilling to shoot an unflattering portrait. “Annie does not share the ruthless nature of editors and writers,” Leibovitz’s friend the book editor Sharon Delano says. “Her enterprise is essentially good-natured.”

From her earliest days at Rolling Stone, Leibovitz demonstrated a near-crippling fear of not coming back with the shot. Lloyd Ziff, a former Rolling Stone designer, remembers Leibovitz being sent out to get a simple image of the world’s oldest Coke bottle kept in some little museum. “She took 300 to 500 Polaroids of it,” he says. “I don’t care who you are or what levels of energy or patience you have,” says Carter, “Annie will wear you out. She’ll beat you. Because she’ll have more patience than you do. And she will eventually get her shot.” Arnold Schwarzenegger still jokes about flying through a blizzard in a helicopter, then nearly freezing to death for the 1997 Vanity Fair cover image of him on skis on a mountain top in Sun Valley, Idaho.

Leibovitz once described her portraiture method as “get ’em somewhere where they’re bored shitless and there’s nothing to do except take pictures.” From there, she would work her subjects to the point of exhaustion, a state that could lead to revealing moments of vulnerability. For a 1981 Rolling Stone shoot, William Hurt sat in his parents’ house in New Jersey one afternoon. At seven o’clock the next morning, Leibovitz was still shooting the actor, who by now was wearing only a pair of briefs. Getting her subjects to disrobe became such a familiar gambit that by the time Leibovitz moved to Vanity Fair, she vowed to “shake this reputation as the girl who gets people to undress.” That never happened, of course. Some of her most talked-about shots at Vanity Fair were the naked-and-pregnant 1991 Demi Moore cover, the 2006 Hollywood Issue cover with Tom Ford hovering lasciviously over the nude Keira Knightley and Scarlett Johansson, and the 2008 shot of 15-year-old Miley Cyrus covered only in a sheet.

Photographers are typically paid a fee for their work, plus expenses. The client, whether it’s a magazine, advertiser, or individual, stipulates an expense budget that the photographer must operate within. From the start, Leibovitz’s perfectionism led her to pay little or no attention to budget restrictions, and she spent money recklessly, losing cameras, accruing parking tickets, and even abandoning rental cars.

In the early Rolling Stone days, Leibovitz was a sort of little sister to the magazine’s staff, smoking, drinking, and hot-tubbing alongside Wenner, Thompson, and the others. In 1975, against Wenner’s advice, Leibovitz accepted a two-month gig as the Rolling Stones’ official photographer for their Tour of the Americas. Everyone drank and got high on a Stones tour, of course, but when Leibovitz returned to San Francisco, her appetite for cocaine had become more than merely recreational. Robert Draper’s Rolling Stone Magazine: The Uncensored History paints Leibovitz as a full-fledged drug addict, who twice overdosed. She may have even hocked some of her cameras to pay for drugs, he writes.

Leibovitz left Rolling Stone for Vanity Fair in 1983. Her reputation for dubious money management apparently traveled with her. “Getting her accounts at rental houses and film labs was a struggle,” says Andrew Eccles, now a highly regarded photographer who worked as Leibovitz’s assistant from 1983 to 1986. “I had to get people to believe me when I said it wasn’t the old days anymore. People would actually get paid for their equipment.” Because of her credit issues, Leibovitz was forced to deal almost exclusively in cash. In 1987, American Express offered her a plum ad campaign. Ironically, Leibovitz’s application for a card had been denied many times. After the ad agency found out she’d lost an envelope containing several thousand dollars in a phone booth during their shoot, strings were finally pulled to get her a card.

Leibovitz's West Village home. Photo: Christopher Peterson/BuzzFoto/FilmMagic

When Tina Brown became the editor of Vanity Fair in 1984, Leibovitz was one of its marquee attractions. She shot everyone—Nicole Kidman, Uma Thurman, the Bush Cabinet—and her projects became bigger and increasingly expensive to produce. When she decided to photograph Whoopi Goldberg in a bathtub full of milk, she could now dispatch a staff to buy and warm dozens of gallons of milk.

Her bloated work expenses were a chronic concern. Anthony Accardi, Leibovitz’s onetime printer, recalls that jobs were often rushed, like the time he had to show up to a lab at 3 a.m. to pick up film of Bill Clinton and have work prints ready by 7 a.m., a job so hurried that he billed Condé Nast three times his regular rate. Accardi was stunned by the number of work prints Leibovitz would order, and apparently so was Condé Nast. After Accardi printed 300 oversize work prints of a Roseanne Barr shoot and billed Vanity Fair some $15,000, he received a letter from Graydon Carter himself, informing him that after this job, he’d be paid for no more than 50 such prints. “Like I was going to tell Annie that?” Accardi says with a laugh. “She would’ve boxed my ears.”

Eccles says Leibovitz could be downright tyrannical. “I once narrowly escaped being hit by a pair of shoes,” he says. “To this day, I’ve never been as nervous photographing a subject as I have assisting her. And that includes the several times I’ve been sent to the White House.” Leibovitz, Eccles says, once slammed her fists on a table, swearing she was going to kill him after a lighting test hadn’t gone well. “Go ahead, hit me,” Eccles said. He was by then so accustomed to the behavior, he says, that he didn’t flinch. “You’re not afraid of me,” Leibovitz lamented, skulking off. “It’s not fun anymore.” After her outbursts, Eccles says, Leibovitz would almost always call and apologize. Still, he left on good terms. “I adore Annie,” he says. “I’ll go to the mat for her as the greatest photographer there ever was in any genre.”

“She wanted her life to be like a magazine spread, nothing out of place, everything perfect.”

Starting in 1993, Leibovitz also began doing regular fashion shoots for Vogue. Her already elaborate productions eventually became virtually indistinguishable in scale from film sets. One of the most over-the-top undertakings was the multi-page 2005 Wizard of Oz couture portfolio in which Jeff Koons was featured decked out as a winged monkey flying through the air with Keira Knightley as Dorothy.

Leibovitz had always lived in modest apartments on the Upper West Side, but in the nineties she began buying and renovating expensive properties downtown. In 1994, she bought the Chelsea penthouse in London Terrace, and spent considerably more on a gut renovation (extravagant renovations became something of an obsession). In 1996, she acquired the Rhinebeck estate and converted it into a sprawling country home. In 1999, for $2.1 million, she purchased a 14,000-square-foot auto shop on West 26th Street, a five-minute walk from her Chelsea apartment, and built it into a state-of-the-art photo studio.

Leibovitz was sober now—her family had coaxed her into rehab in the early eighties. But the familiar compulsive nature persisted. Eccles remembers many mornings of walking into a hotel restaurant and seeing Leibovitz stewing because she wasn’t convinced that she’d yet come upon the ideal setup for a shot. “She could never quite relax, because she was afraid that there was an even better idea,” Eccles says. “The anxiousness about whether a photograph was going to be good enough was hard to be around. It seemed like a difficult way to live.”

In 2007, Leibovitz agreed to take Tina Brown’s portrait for her Princess Diana biography. “I thought she would just take a snap at my home,” Brown says. Leibovitz insisted that the shoot be on the beach near Brown’s summer home in Quogue, even though it was March and freezing. Leibovitz showed up in a van with a stylist and assistant. A second car stuffed full of clothes soon arrived. A wind machine would eventually be engaged. This was all on Leibovitz’s dime; she refused to charge Brown a cent. Unsatisfied with the day’s work, Leibovitz suggested that they try again the next day. “We’re through!” Brown told her, appreciative but worn out. “She’s a massive perfectionist,” Brown says, “and absolutely doesn’t care about the impact on her own bottom line.”

Annie Leibovitz and Susan Sontag were introduced in the late eighties by their mutual friend Sharon Delano, then an editor at Vanity Fair. Soon, Leibovitz and Sontag were a couple. Sontag was sixteen years older, and while she had had female lovers, neither woman identified herself as a lesbian. Still, they were romantically involved. “Call us lovers,” Leibovitz once said. “I like ‘lovers.’ You know, ‘lovers’ sounds romantic … I just had a problem with ‘partner’ or ‘companion.’ It just sounds like two little old ladies.” However they characterized the relationship, they were an unlikely pair. Leibovitz wasn’t apologetic about the fact that she barely read, while Sontag housed 15,000 books in her apartment. “I don’t think anybody would describe Annie as intellectual,” says Sontag’s only sibling, Judith Cohen, who feels warmly toward Leibovitz.

Leibovitz has shot scores of memorable celebrity, fashion, and darker, more artistic photos in her 40-year career.Photo: James Devaney/WireImage (Leibovitz and De Niro)

There was an obvious symbiosis to the relationship. Sontag, whose 1977 monograph On Photography is required reading for most photography majors, gave Leibovitz, who believed the label of “celebrity photographer” was demeaning, a new kind of credibility. “It’s as if Tom Cruise started going out with Akira Kurosowa,” a respected portrait photographer told me. Leibovitz, meanwhile, offered Sontag tangible benefits. Despite her well-maintained image as an intellectual, Sontag enjoyed being around movie stars and sometimes dropped by Leibovitz’s studio for high-wattage shoots. Sontag also enjoyed sharing Leibovitz’s high-priced life. Because they each had a top-floor apartment in Chelsea’s redbrick London Terrace—with terraces across from one another—Leibovitz’s housekeeper, Sookhee, would clean Sontag’s place, too, and Leibovitz’s personal chef would bring meals to Sontag. Sontag once called Paris “the alternative capital of my imagination”; Leibovitz bought an apartment for the couple to use overlooking the Seine.

The famously opinionated Sontag encouraged Leibovitz to make her work more personal and artistic. There was a student-teacher quality to their relationship, with all the attendant power dynamics. “The fact that she was even interested in me or my work was just so flattering to me,” Leibovitz once said. “Even if she criticized it.” Sontag advised Leibovitz to find a home at the prestigious Edwynn Houk Gallery, convincing her of the importance of sharing representation with the estates of Brassaï and Dorothea Lange. Sontag’s input wasn’t welcomed by everyone. In the mid-nineties, Leibovitz altered her style of shooting cover images to appeal more to Sontag’s taste than that of her boss. “Her pictures became very dark and brooding and painterly,” Carter says of the years he calls Leibovitz’s Blue Period. “The portraits were spectacular, but in order to sell between 400,000 and 700,000 copies on the newsstand, you need a cover that’s either funny or iconic.”

In 2001, at 51, Leibovitz gave birth to a daughter, Sarah. Even though Sontag would be present for the birth and doted on Sarah, she wasn’t in favor of the idea of Leibovitz’s having a child. “I think she wanted me to herself,” Leibovitz has said. The distance between the couple grew wider when Leibovitz hired a rigid British baby nurse whom Sontag despised and came to call “the nanny from hell.”

Dan Kellum worked as Leibovitz’s assistant in 2002. Despite the ample help Leibovitz had, Kellum says he felt sorry for her because she was emotionally alone. “There was no one in Annie’s life that could say to her, ‘Relax, the baby’s going to be fine,’ ” he says. Leibovitz’s obsessiveness was reflected in her mothering, Kellum says. When Sarah started eating solid food, a rigorous journaling policy was instituted, in which every bite and bowel movement was to be committed to an unlined black notebook purchased from the Swedish stationer Ordning & Reda. Kellum regularly ordered replacement books from Stockholm so that the journaling could easily continue from one book to another. Once, when an order got lost in customs, Leibovitz insisted on having two notebooks sent from Stockholm via a special type of courier service called “quicking.” It was essentially like buying a seat for a parcel on the next plane. The shipping cost alone came to $800. (Leibovitz also had twin daughters, Samuelle and Susan, born via surrogate and named after her father and Sontag, in 2005.)

Sontag had had recurring bouts of cancer over the years, and in the spring of 2004, she learned that the disease had returned. Despite the distance between them, and the fact that Leibovitz was also attending to her own father, Sam, who was being treated for terminal lung cancer in Florida at the time, Leibovitz spared no effort in helping Sontag. She secured a friend’s private plane to transport Sontag to Seattle for a bone-marrow transplant, arranged for friends and family to be with her around the clock, and chartered another private plane to fly her back to New York’s Memorial Sloan-Kettering Cancer Center. Three days after Christmas in 2004, Sontag passed away.

When the state of Leibovitz’s finances later became public, outlets like Salon trumpeted the “gay tax” theory, the idea that Leibovitz’s finances had been depleted by the taxes she’d had to pay on her inheritance from Sontag. That wasn’t true. With the exception of four items of only sentimental value, the bulk of Sontag’s estate went to David Rieff, Sontag’s only child. Leibovitz’s relationship with Sontag was not mentioned in Sontag’s New York Times obituary, and Leibovitz did not speak at Sontag’s memorial service.

In 2006, Leibovitz mounted a retrospective of her previous fifteen years of work at the Brooklyn Museum. Along with the well-known magazine photographs, she included the private, more artistic work Sontag had encouraged, including shots of Sontag, unrecognizably bloated and visibly in pain in her hospital bed in Seattle, and one of Sontag’s body laid out in her favorite dress in a back room of the Frank E. Campbell Funeral Chapel. The New York Times critic Roberta Smith dubbed the portraits “professional but pedestrian.” “It is hard not to feel that Sontag functioned a bit like Ms. Leibovitz’s own personal celebrity,” Smith wrote, “enabling her to share a fame that she found more authentic than her own.” Last year, Rieff published Swimming in a Sea of Death, a memoir of his mother’s battle with cancer. He mentions Leibovitz’s name exactly twice in the book, once to describe her pictures of his dead and dying mother as “carnival images of celebrity death.”

Judith Cohen doesn’t hide the fact that she agrees about little with Rieff. She also says that perhaps if her sister had lived, Leibovitz might not have found herself in such a financial predicament. “Susan was really prudent about a lot of things,” Cohen says. “She was not a big spender. And I think she did advise against certain things Annie did, like Greenwich Village.”

Leibovitz purchased the two adjacent Greek Revival–style townhouses on 11th Street near Greenwich Street in 2002 and immediately began converting them into a single residence. Initially, she intended to keep the renovations simple. At one point, she aimed to limit the budget to about $500,000, not that great a sum considering that the buildings contained more than 8,500 square feet of space. She made token efforts to keep expenses down, Kellum says; she once scolded him for bringing Starbucks iced cappuccinos to a construction meeting. But as time went on, she continued to add expensive design elements, like having a sub-basement in which she could stand, rather than the original five-feet-high crawl space. The budget grew accordingly.

On Friday, October 11, 2002, Kellum was busy coordinating Sarah’s first birthday party, scheduled for the next day in Rhinebeck. The plans included a petting zoo and performances by hipster kiddie singer Dan Zanes and country singer Rosanne Cash, who was being flown in to sing Sarah’s favorite lullaby. Leibovitz was upset because the forecast called for rain; she didn’t want 300 mud-caked guests traipsing through the buildings. Early that afternoon, Kellum had answered his phone to hear the panicked voice of Mark Zeff, the Greenwich Village project’s designer. Something had happened at the construction site.

For days, a crew had been digging below the townhouses to build the sub-basement. The ground beneath the buildings had actually been underwater until 1820, when landfill turned what had been the Hudson River into buildable land west of Hudson Street. In the midst of the excavation, the wall Leibovitz’s building shared with the little trapezoidal building at 311 West 11th Street groaned and sank several inches. The wall separated from the floors, leaving a gaping hole. Fire trucks encircled the scene, and Con Ed workers raced to locate and repair a burst gas line. Insurance covered much of the damage, but the young family next door, whose home was immediately condemned, sued Leibovitz. Under a settlement the parties reached in 2003, Leibovitz would have to purchase their home for $1.87 million.

In late 2006, she secured almost $7.25 million in mortgages from Rhinebeck Properties LLC, whose address is at Condé Nast’s 4 Times Square headquarters.

As large as that sum was, Leibovitz, by all appearances, should have been able to cover it. But that wasn’t the case. For one, Leibovitz wasn’t earning as much as people thought. The $5 million annual salary from Condé Nast? “That’s probably considerably high,” says Carter, who adds that he doesn’t know the exact sum because her contract is negotiated with Condé Nast, not Vanity Fair. A person close to Leibovitz insists that her oft-mentioned “contract for life” is pure fiction. In fact, a copy of Leibovitz’s contract that came to light in a recent lawsuit indicates that she is being paid $2 million per year, and only through 2011. The rumored $250,000 day rate to do an advertising job also appears to have been greatly exaggerated. “It’s not half that,” says a source with direct knowledge of Leibovitz’s finances.

Leibovitz was never particularly interested in side gigs either. Despite a $100,000 price tag for commissioned portraits (a business that kept Andy Warhol rich in middle age), there was always demand, says her former and recently rehired gallerist James Danziger. Still, the hurdles involved tended to scare off potential clients. Leibovitz might not take the job at all, if she did it could take years to schedule, and she had been known to cancel at the last minute to do a late-breaking Condé Nast assignment. In 1990, gallery owner Mary Boone paid Leibovitz $197,000 to take five portraits of artists she represented to promote her gallery. For various reasons, Leibovitz shot only four portraits but promised Boone she’d make good by taking a portrait of Boone’s then-5-year-old son, Max. In 2003, thirteen years and several postponements after Leibovitz took the assignment, Boone sued Leibovitz. A judge dismissed the suit, owing to a six-year statute of limitations.

Neither did Leibovitz behave as if the money to be earned in the fine-art market was worth the effort. Edwynn Houk, her gallerist until last year, had no trouble selling her images. Leibovitz, however, could never get around to signing the prints. A buyer might have paid in full but still not get his picture for two years. “Nothing seems easier to me,” Houk says of the stack of photos perpetually collecting dust in her studio. “It’s a mystery why it took so long.” It was a complaint Houk was unable to register with Leibovitz directly because of her habit of postponing their scheduled calls. “Our record was sixteen months,” he says with a sigh. Says a onetime business associate, “I think there was an element of satisfaction, thinking that everyone would just understand she was too busy meeting Tom Cruise here or Oprah there.”

Leibovitz had also built a life that had become extraordinarily expensive to maintain. It wasn’t just the mortgages on the homes. It was the Range Rover, the trips to Paris, the chef and housekeeper, the handyman, the personal yoga instructor, the terrace gardener, and the live-in nanny. There was only one man Leibovitz deemed qualified to work on anything involving air-conditioning or ductwork at either residence, and he lived in Vermont. “She wanted her life to be like a magazine spread,” Kellum says. “Everything beautiful, nothing out of place. She wanted everything to be perfect.”

Leibovitz was also famously generous with her family. “If I was in a bookstore with my sister, I would be afraid to even look at a book,” says Leibovitz’s younger sister Paula. “If I even looked at it, she’d turn around and buy it for me.” When Marilyn Leibovitz was diagnosed with terminal cancer in 2007, Leibovitz rented her a house on the ocean so she’d be able to hear the same surf she heard as a child summering on the Jersey shore.

It’s impossible to account for all of Leibovitz’s line-item expenses, but as surprising as it may be to outsiders, she was clearly spending beyond her means. One close associate of Leibovitz’s theorizes that she identified too much with her subjects. “Photographers aren’t professional athletes, recording artists, or supermodels,” the source says. “Compared to 99 percent of the world, she makes a vast fortune. The problem occurs when a person becomes so famous that they start feeling that they’re more in line financially with Oprah or Madonna.”

In 2004, still in need of money to help pay for the $1.87 million purchase of the damaged Greenwich Village house, Leibovitz took out a bridge loan, a short-term, typically high-interest financial instrument. The loan was intended to tide her over until she could sell her other properties. Later that year, she sold the 26th Street studio for almost $11.4 million; in 2005, she sold the London Terrace penthouse. Those sales must have generated millions in profit, but they still didn’t get her out of the red. Leibovitz, like so many Americans during the boom years, had been taking out additional mortgages, heaping loan upon loan. Before selling her photo studio, she’d borrowed an additional $3.5 million against it, above the original $2.1 million mortgage. The initial mortgage on the Rhinebeck property was about $1.8 million. Eventually, she had some $11 million mortgaged against it. She’d bought the Greenwich Village property with a $1.2 million loan, and three years later tacked on an addition $2.2 million mortgage. By last year, the total value of the mortgages she was carrying came to about $15 million. Assuming she had a 5 percent 30-year fixed-rate mortgage on that amount, her annual outlay just to service the debt on those loans would have come to almost $1 million.

Leibovitz also had tax problems. Because of income taxes the IRS said Leibovitz had failed to pay, the agency attached liens on her properties totaling $1.9 million in 2005 and 2006. Dutchess County records show that she had also neglected to pay more than $92,000 in 2005 property taxes for the Rhinebeck place.

By the end of 2006, Leibovitz needed money desperately and was probably unable to tap additional funds from traditional lenders. Her only alternative was to find someone willing to lend her more. Late that year, she secured two mortgages totaling almost $7.25 million from an entity called Rhinebeck Properties LLC, which had its address at Condé Nast’s 4 Times Square headquarters. Rumors had long circulated that Condé Nast offered its top executives low-interest loans, and at the time, the company was still flush—the following September’s 754-page issue of Vogue threatened to cripple mail carriers everywhere. The cover featured a Leibovitz picture of Kirsten Dunst as Marie Antoinette in a towering wig. Leibovitz was probably too consumed to see any irony in the fact that she and a slew of assistants—as well as the documentary film crew following her—had traveled all the way to Versailles, the site of Marie Antoinette’s last stand, to get their shot.

Leibovitz’s financial-management team had long consisted of her agent, Jimmy Moffat, co-founder of the elite photo-representation agency Art + Commerce, and her accountant, Rick Kantor. Kantor declined to comment for this story, but Moffat says he and Kantor did all they could to discourage Leibovitz’s rampant spending. “Did I or Rick or even Annie herself say all the time, ‘We’ve got to downsize’? Sure,” he says. The Greenwich Village townhouse, he points out, was supposed to be a form of scaling back. The plan was to unload the London Terrace place and the 26th Street studio and buy one property in which she could both live and work. “Through ill planning or bad luck, it didn’t work out the way she wanted it to,” Moffat says. (Kantor declined to comment.)

In 2007, Leibovitz decided to shake up her financial management. Kantor was dispatched and replaced by a man named Kenneth Starr (no relation to the prosecutor), who was something of a celebrity accountant, having managed money for Wesley Snipes, in his pre-tax-protesting days, and Sylvester Stallone. In 2008, with Leibovitz still seeking additional ways to borrow money, Starr told her about a company called Art Capital, founded by a New York entrepreneur named Ian Peck and co-owned by a man named Baird Ryan. The son of a successful art dealer and a wealthy developer, Peck had run a Madison Avenue gallery called Ian Peck Fine Paintings, then during the dot-com boom he established a short-lived website called, which sought to lease rather than sell expensive paintings to corporate clients. Formed in 1999, Art Capital would eventually loan money for a short period of time—a year and a half or less, usually—often at a relatively high interest rate, using art and antiques as collateral. For those who have most of their assets in art, particularly gallery owners and art dealers, this constituted a potentially valuable service, since banks are typically reluctant to loan against fine art and antiques because market valuations vary so wildly. Art Capital, however, was willing to make loans of up to 50 percent of the value of the collateral, and since valuations were often done in-house, the loans could be turned around quickly, often within days.

Leibovitz, meanwhile, had fresh money problems. Vendors whom she hadn’t been able to pay began calling in the debts. Zeff Design, the firm doing the Greenwich Village renovation, which had been sending Leibovitz bills for $51,000 for five years, finally sued her in 2008. Traditionally Leibovitz would submit claims to Condé Nast or an advertising client to cover her expenses. The client would then reimburse her, and she would pay her vendors. Now, it appeared, those payments weren’t making it out the door. Brent Langton, a lighting specialist, sued Leibovitz, claiming his company was owed more than $221,000 for rentals in 2006 and 2007. An agency representing Nicoletta Santoro, a clothing stylist, also sued, saying it was owed over $385,000. According to a person familiar with the situation, after Leibovitz failed to pay hundreds of thousands of dollars she owed Box Studios, an elite postproduction company, they insisted on billing Condé Nast directly.

“You’re not afraid of me,” she said. “It’s not fun anymore.”

In June 2007, Leibovitz arranged a meeting with Edwynn Houk and announced she wanted him to start selling her prints aggressively. Houk had been selling her portraits of musicians like Iggy Pop and Johnny Cash for between $4,500 and $5,500 each, but Leibovitz needed to make much more than those prices could generate. Together they decided to create a Master Set—200 of her most iconic images, printed in a massive 40-inch-by-60-inch format, limited to only seven prints each, and sold at $25,000 per print. The total value of the set would come to $35 million.

About a year later, after premiering the first Master Set prints at Paris Photo, Houk got a call from one of Leibovitz’s assistants informing him that, after a decade of working together, she was dropping him as her gallerist. In mid-September 2008, the auction house Phillips de Pury & Company proudly announced that it now represented Leibovitz, and its first order of business would be to premiere 24 images of the Master Set in its London gallery on October 23. The price of each print was now set at $33,000.

When Leibovitz signed on with Phillips de Pury, Phillips management was unaware of a critical fact—one that it first learned about from a February 24 front-page story in the New York Times. Headlined THAT OLD MASTER? IT’S DOWN AT THE PAWNSHOP, the story reported that Leibovitz had taken two loans from Art Capital totaling $15.5 million (the actual figure turned out to be even higher—$24 million). In the same month in which Leibovitz had allowed Phillips de Pury to announce the partnership, it turns out, she had pawned at least some of the rights to her work as loan collateral. In an agreement reached several months later, Art Capital appears to have become the only entity authorized to sell her photos. (Leibovitz has since left Phillips de Pury and returned to James Danziger; presumably Leibovitz and Danziger believe they still have or can regain the sales rights.)

The Art Capital loan effectively consolidated all of Leibovitz’s major outstanding obligations, including her mortgages. The interest rate is unknown, but the term is just one year. That means Leibovitz has to come up with $24 million, plus interest, by this September. Under the terms of the agreement, Art Capital could be entitled to up to 10 percent on the sale of 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.*

Goldman Sachs, which helped finance the loan, now seems to be distancing itself from Art Capital and reaching out to Leibovitz. “We are deeply troubled by recent developments concerning Annie Leibovitz and Art Capital,” says Goldman spokeswoman Andrea Raphael. “Goldman Sachs owns a portion of the loan underwritten by an affiliate of Art Capital to Annie Leibovitz, but we have no involvement in the current sales-agreement dispute between Art Capital and Ms. Leibovitz. We have proposed to Art Capital that we terminate the current loan agreement with their affiliate so that we can work directly with Ms. Leibovitz to help her resolve her financing needs.”

Leibovitz has told people that she didn’t understand the ramifications of the agreement she signed. She did not show the contract to any member of her family or even her agent before she signed it, nor did she hire her own attorney to review the document. Instead she relied on an attorney whom Starr provided. “Trust me,” says her sister Paula. “She thought it was a pure loan. That New York Times article was as much news to her as it was to anybody else.”

“Ms. Leibovitz and a small army of her lawyers and financial advisers understood the terms of the deal,” insists Montieth Illingworth, a spokesman for Art Capital. “It was discussed explicitly with her numerous times over several months. Ms. Leibovitz signed her name five times to different documents in the transaction. To say otherwise is not credible.”

“Annie is working to resolve the situation, so it would be inappropriate to comment,” says Leibovitz’s spokesman Matthew Hiltzik.

Art Capital has treated borrowers aggressively in the past. In 2003, the company loaned $1.5 million to a wealthy young widow named Melanie Gill—who had inherited a large collection of museum-quality furniture—so she could buy a hotel and spa in New Orleans. After Gill missed one interest payment, Art Capital consigned her antiques to Christie’s and foreclosed on and sold her apartment.

The chances of Leibovitz’s getting out from under the pile of debt now looming over her seem slim. At one point in time, Si Newhouse may have stepped forward to bail her out, but with Condé Nast suffering badly in the current economic climate, along with everyone else, it’s hard to imagine that he would cover more than a portion of Leibovitz’s debt.

One potential white knight, however, has emerged: Getty Images, the world’s leading stock-photo agency. For years, Getty had pursued Leibovitz unsuccessfully. In January, Art Capital reached out to the agency to gauge its interest in purchasing the rights to Leibovitz’s photo archive, which Art Capital now claimed to have the right to sell. Art Capital believed the work was worth $50 million or so. Getty offered $15 million. The deal went nowhere.

On March 19, Getty announced that it had entered into a business agreement with Leibovitz. The deal, struck with Orchard Represents, Getty’s advertising representation arm, called for Leibovitz to shoot eight photography assignments for $1.1 million.

Following the March press release from Getty, representatives from Art Capital began calling Leibovitz repeatedly to schedule a time when they could come over to the Greenwich Village townhouse to inspect her belongings and bring a real-estate agent who would be listing the place. Leibovitz felt harassed by the calls. Among other things, Leibovitz was not under the impression that she was going to have to sell her apartment.

In April, Art Capital sued Getty for breach of contract and fraud. In essence, they argued that Getty had improperly used its dealings with Art Capital to strike its deal with Leibovitz. Three months later, Art Capital filed suit against Leibovitz, charging that she had willfully ignored the terms of the loan by not allowing Art Capital into her house. Getty has moved for the case to be dismissed; a judge recently agreed to dismiss some of the charges, but not others. Both cases are still pending.

Whatever happens, Leibovitz’s life will obviously never be the same. Paula Leibovitz thinks it’s time for her sister to start over. “As a person from California, I’ve been trying to get her to move out here,” she says. “I keep telling her, everyone’s really nice in California.”

How Could This Happen to Annie Leibovitz?