Famed celebrity photographer Annie Leibovitz has been threatened with the prospect of losing all rights to her entire catalog if she fails to pay back a $24 million loan today. Leibovitz, 59, offered up the catalog and all her properties as collateral for the loan, which was required to settle multiple mounting debts. Basically Leibovitz bought a lot of real estate, failed to pay multiple vendors and tax obligations, and got in way over her financial head. The lender, Art Capital, says Leibovitz must pay up today or lose rights to all the photos she’s ever taken, along with all rights to all photos she’ll take for the rest of her life. Her work is easily the most well known among modern celebrity photographs and includes the iconic photo of a naked John Lennon snuggling with Yoko Ono for the cover of Rolling Stone and the naked photo of a pregnant Demi Moore for the cover of Vanity Fair. It is widely expected that Leibovitz will file for bankruptcy in a bid to keep her catalog. The Associated Press reports that the lender is calling in the loan because Leibovitz failed to work with them to license some photos and appraise her property:

Annie Leibovitz’s artsy, provocative portraits of celebrities regularly grace the covers of Vanity Fair and Vogue, images that have made her as famous as her subjects and earned her millions.

Now Leibovitz risks losing the copyright to the images – and her entire life’s work – if she doesn’t pay back a $24 million loan by Tuesday. Art Capital Group, a New York company that issues short-term loans against fine and decorative arts and real estate, sued her in late July for breach of contract.

“We have clear contractual rights and will protect them in any scenario,” said ACG spokesman Montieth Illingworth on Friday. “Our preference is for this to be resolved.”

Some experts say filing for bankruptcy reorganization could be the best option for Leibovitz, 59, who has put up as collateral her three historic Greenwich Village townhouses, an upstate property and work. She bought two of the townhouses in 2002, embarking on extensive renovations to combine them into one property. That spurred protests from historic preservationists and a $15 million lawsuit by a neighbor.

“Based on the magnitude of her obligations and the facts as they are publicly known, that would be the best option,” said art lawyer Peter Stern.

Leibovitz’s images of musicians, presidents and Hollywood glitterati are cultural touchstones. One of her earliest photos is of John Lennon curled up naked in a fetal position with Yoko Ono, taken just hours before he was assassinated in 1980.

So to many, her decision to gamble the rights to her work seems inexplicable. “Jaw-dropping,” Stern said.

Her editorial agent, Contact Press Images, has declined to comment on the case, saying it is a private matter.

Her spokesman, Matthew Hiltzik, has accused ACG of harassment.

“There has been tension and dispute since the beginning … For now, her attention remains on her photography and on continuing to organize her finances,” Hiltzik said.

A reorganization filing would suspend all litigation against Leibovitz and place her finances under the protection of a federal judge, said bankruptcy lawyer Paul Silverman, who works with Stern. Neither attorney is involved in the case.

Last year, Leibovitz put up her homes and the copyright to every picture she has ever taken – or will take – as collateral to secure the loan to pay off her mounting debt: unpaid bills, mortgage payments and tax liens, ACG said.

While no one has suggested publicly how Leibovitz got into such desperate financial straits, the mortgage debt on all her properties – including the townhouses in Greenwich Village and a sprawling estate in Rhinebeck, N.Y. – totaled about $15 million. This includes the $1.2 million loan she took out on two of the townhouses, and another $2.2 million three years later, according to New York magazine.

In addition to her mortgages, court records show that she piled up years of federal, state and city liens and judgments from vendors for unpaid bills – all presumably now satisfied with the $24 million she borrowed. Federal records show that Leibovitz owed a total of $2.1 million in unpaid taxes for tax years 2004, 2006 and 2007. She also had New York state tax liens of $247,980 for six years, including $135,915 in 2007. And she owed New York City several thousand dollars for three years.

In 2008, a design firm that did work on one of her Greenwich Village properties claimed that she owed it $51,000. Leibovitz was also accused that year of refusing to pay $386,000 to a photo stylist during a 2007 shoot Leibovitz did for the Disney Company in 2007.

Her spokesman, Hiltzik, declined Thursday to discuss her finances.

“Annie is working to resolve the situation so it would be inappropriate to comment,” Hiltzik said.

Art Capital Group, which consolidated all her loans in September 2008, charged in its lawsuit that Leibovitz breached the contract by refusing to allow real estate experts into her homes to appraise their value and by blocking ACG from selling her photographs.

[AP via The Huffington Post]

Lender Art Capital Group is a high end pawn shop that accepts art and valuables in exchange for loans. Owner Ian Peck says that they aim to “avoid defaulting at all costs. Given the trouble involved in a default, it’s better karma and business not to.” The AP reports that the owner’s assurances probably aren’t true at all. “Just like pawn shops, [Art Capital Group] is just as happy to see a default, according to art and money experts.” Do you think they looked for an excuse to latch on to Leibovitz’s valuable catalog? They did loan her $25 million, but are likely to see quite a profit if they’re successful in obtaining the rights to all her photos. She may try to thwart them with a bankruptcy claim, and this matter is likely to end up in the courts for years. It’s kind of mind boggling to see how super rich people can have such massive money problems.

Annie Leibovitz is shown on 6/18/09 at the opening of “Annie Leibovitz: a photographer life. 1990-2005” in Madrid. Credit: WENN.com