Annie Leibovitz in debt, risking Chapter 11

Celebrities may soon need a new outlet to help make them famous — Annie Leibovitz, the New York photographer whose skills with a lens have made untold actors world famous is in life-changing debt.

Last September, Annie, 59, took out a $24-million loan with New York’s ‘Art Capital Group’, and is now in breach of the terms and staring down bankruptcy like an oncoming train.

The loan was meant to be secured by the worldwide rights to Annie’s vast photo collection and large Real Estate holdings, but Art Capital’s new lawsuit, filed in New York’s Supreme Court last week, claims Anne is refusing to co-operate with their agents and now has five weeks to repay the whole loan — with interest and fees!

Losing the case would mean instant ruin — and that’s where the bankruptcy comes in, “It may be fairer, for her and for all of her creditors,” says Thomas Kline, a partner at ‘Andrews Kurth,’ a legal firm that specialize in such deals. “Filing for bankruptcy will automatically postpone the litigation while she considers her options,” he said.

The problems started after Leibovitz, who created such iconic shots as John and Yoko both nude in a fetal position, and Demi Moore’s recent pregnant cover for Vanity Fair, was drowning in tax liens and bills. Most Banks won’t lend against art, so Annie went to Art Capital to help bail her out. The terms of the loan made them her “irrevocable, exclusive agent” for all her works and her property for the length of the loan – plus two years after she had paid it all off [??]

Her situation since has become visibly dire — Last year, Annie missed paying $1.8-million in federal taxes and her real estate holdings were draining cash like a wound. A neighbor filed a $15-million lawsuit claiming she damaged their home — and it cost Annie almost $2-million just to make them shut up. “Creative people often have difficulties managing their finances,” Brad Klontz, a financial psychologist told Bloomberg. “They are susceptible to the belief there will always be enough money,” he said.

Annie’s current financial morass is believed to have been made even worse by her new role as a mom; In 2005, a surrogate mother gave Annie twin girls — and that gets expensive! The process can run to $125,000 per child.   Add her other cash problems and Annie’s in pain! “Whatever legal strategy she chooses to deal with the Art Capital lawsuit, it will be costly,” Thomas Kline muses, sadly. “She just doesn’t have an easy way home.”