Art Capital made at least $16 million off Annie Leibovitz
What kind of interest rate do rich people pay when they borrow money? In the case of Annie Leibovitz, the answer is something over 44%. That’s the most interesting revelation from the latest court case to embroil the celebrity photographer, wherein a company called Brunswick Capital Partners says that it helped Leibovitz refinance her Art Capital Group debt with a $40 million loan from Colony Capital.
The refinancing happened in March of this year; the original loan from Art Capital, for $24 million, took place in September 2008. Which means that Leibovitz racked up at least $16 million in fees and interest payments over the course of 18 months — and that’s not including any payments that she did manage to make to Art Capital along the way. That’s a rate of something over $10 million per year on the initial loan, or 44%.
The depth of Leibovitz’s financial woes is evidenced by the fact that she paid Brunswick a $50,000 retainer plus $10,000 a month just to look for new lenders. And that’s before their $800,000 “success fee”. But obviously lending to somebody in such deep financial trouble can be highly profitable: just look at Art Capital’s profits on the deal. I wonder if the Center for Responsible Lending feels like getting involved here.
(I asked Art Capital if they had any comment about this; they said they didn’t, “because we’re bound by confidentiality provisions”.)