Why Didn’t Annie Sell Her Fancy Houses?
Annie Leibovitz should probably just file for bankruptcy before her $US24 million loan to Art Capital comes due. But could she have repaid the loan already, if she’d just sold her damn houses? Bloomberg thinks so!
According to brokers, Leibovitz’s New York real estate is worth “as much as $US40 million,” which is more than she owes Art Capital by quite a lot. But, you know, “as much as” is kind of vague. Her Hudson Valley estate could be worth $US4 million, or $US6 million, or $US10 million. And those West Village townhouses she bought might go for $US24 million to $US30 million, which is hundreds more per square foot than other recently renovated West Village townhouses have been going for lately, but these are super-nice.
So “as much as $US40 million” could also be written as “as little as $US28 million,” which is still more than she owes Art Capital, but not a lot more. Plus then she’d be homeless!
But it’s obviously way too late now to sell off the real estate to pay off the loans. So one would imagine there were good reasons not to try doing this earlier.
We are not as smart as John Cook so we are just totally guessing here, but maybe Annie decided bankruptcy’s a better deal, or she’s still hoping a white knight will buy her out of this deal by labour Day.
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Comments (AU Comments | US Comments)
Very sad story....great talent...not a good money manager......
Ubangi
@Rumpelstilskin: More like Geddy Lee.
Humbuzz
@JasonVelveeta: She's looking like Spencer Tracy!
Rumpelstilskin
@m4ximusprim3: Yeah. Life. Fast. Whoa.
@Atilla the Bun: Are you kidding? This is the greatest comment ever! It reassures us about sanity prevailing in a horror of a charade which has haunted us for nigh on four years now. We have been reassured all along the way by sane judges, but still we did not know if the basis of the slimeball's suit against us would be there forever because she had some sort of exemption against foreclosure which would grant her standing to sue us, the neighbors of that fated land, into perpetuity and thereafter. Now I believe there is reason at the end of this tunnel. (Our attorney costs lots, and is not involved in the counter-bankruptcy action.)
Many thanks. You're all heart, as of right now.
@bongenre: If there was an exemption in NY, it would protect her home from forced sale by general creditors. But it would not trump the federal forfeiture laws, and I think that is how she and Madoff lost their penthouse. So basically, no. Federal forfeiture laws are a BEE-YATCH.
@Tremonius: The bankruptcy laws are federal, but the bankruptcy code allows states to "opt out" of the federal bankruptcy exemptions and create their own. I think the homestead exemption under the Code is like 20k. But Texas, for example, has opted out and provides a homestead exemption of unlimited value and up to 10 acres of property (I think).
However, homestead exemptions will not protect a debtor from foreclosure on their homestead by a bank with a purchase money security interest in the home (i.e., a mortgage)or a creditor with a security interest in the home (the latter sounds like AL's issue). The exemption just protects the debtor from a forced sale of their home to pay creditors with no security interest in the home. And I think in almost all states with a homestead exemption, it only applies to one property, the debtor's primary residence.
So it does not sound like the person you are talking about can stave off foreclosure on one property, much less two, with a bankruptcy filing. The filing creates an automatic stay, but it can be lifted for purposes of foreclosure pretty quickly.
Everybody asleep now after this scintillating comment?
@Atilla the Bun: I don't even know how one would secure a loan on a portion of a property. I know first and second mortgages, but not piecemeal loans.
@Atilla the Bun: Hold it, isn't bankruptcy a federal project? Reason I ask, is, about forty folks are creditors for a nut in CA who is a real slimeball, and she's claiming homeowner exemptions on two properties which are each pending foreclosure sales held off only by her wild thrashing, which includes both Chapter 13 (failed) and now 7 (to fail, if reason prevails). So, will she be able to sit in one of those houses forever while her debt mounts ever higher and the bank simply eats the mortgage? She was over a hundred thousand in deep doodoo way last spring.
You can't wipe out your secured loans with either Chapter 11 or 7, can you? I don't think so. She might be able to shaft the guy who delivers pizza, though.
@GregorMendel: Not that I pretend to fully grasp what a homestead exemption is, but if there were one in New York, would that have permitted Ruth Madoff to maintain her ill-begotten penthouse spread?
bongenre
@misslinda: No homestead exemption in NY? Tough crowd up there!
@resipsaloquacious: that was not passive-aggressive! i am seriously not as smart as him and i was weighing in on a story he's been amazing on because he's on vacation!
@AliHajiSheik: Oh crap! I totally forgot! Whew! I feel much safer now.
@misslinda: Isn't OJ in prison? I think the only club he's swinging at the moment belongs to a burly guy on his cellblock.
AliHajiSheik
@Atilla the Bun: Love it when you talk dirty ATB.
momof3wildkids
@Baroness: No, just one. I was just referring to her townhouse in NYC that seems to be her main residence. But the Bloomberg article makes it sound like the debt is secured by all of her property, in which case a homestead exemption wouldn't apply even in Texas.
@GregorMendel: So really, the solution is to use connect them all with inflatable tubes, using a complicated bridge and tunnel system to avoid roads, and then wildly claim that "they're all one house".
Sounds foolproof to me!
m4ximusprim3
In this market, I think $40 million is wildly optimistic. Also, her financial distress is well-known, there's blood in the water, and offers she'd get would be relentlesly low-balled. Definitely valuable properties, but with the imminent bill due, it's doubtful she could unload it all so quickly, and it would be at fire-sale prices even if she did. She seems to be waiting for one of her mogul pals to rescue her, a Geffen, Calvin, or Diller. So, where are they? Not returning her calls, I guess. Jann, are you there?
I would seriously resent it if someone stepped in and saved her now.
She should be responsible for her actions.
Island of Misfit Toys
@PikaDar Brisetout: On the plus side, she can make some of it back in one of those "life comes at you fast" nationwide ads.
m4ximusprim3
@Baroness: Nah. Just one house under the Homestead Exemption. But there is no limit on how much it can be worth.
@Atilla the Bun: There is no homestead exemption in NY. As an aside, the homestead exemption is how OJ still gets to live on his Florida estate, swinging golf clubs and looking for the killer.
Another one hits dust. Quelle surprise. It's the MC Hammer thing.
Why didn't she sell off her houses? I think the better question is why she sold her soul to Art Capital to keep them in the first place.
momof3wildkids
@Atilla the Bun: But could a debtor in Texas hold on to four houses?
"Felt morally bad"- bwahaha. Highly doubt it with Miss Liebovitz here.
Why so passive-aggressive to Cook, P? What gives?
It would depend on whether the loan is secured by the entire value of the house. I don't know what the homestead exemption is in NYC, but in Texas it's huge. So if all the property is not used as collateral, the debtor can hang on to her house and discharge much of the unsecured debt. Selling your house to pay off the debt wouldn't be all that wise financially unless you felt morally bad about not paying off everybody you owe.