How Getty Images Screwed Art Capital Group's Deal With Annie Leibovitz

There are new details in Art Capital Group's ongoing legal battle with celebrity photographer/pauper Annie Leibovitz: Art Capital has also sued Getty Images, alleging that the giant photo agency tried to undermine its deal with Leibovitz.

Art Capital loaned Leibovitz $24 million last year to help her consolidate her gargantuan debts to her employer Condé Nast and others, taking the rights to Leibovitz's homes and photo archive as collateral. The deal also granted Art Capital the exclusive right to agent a sale of Leibovitz's photos, including any future photo shoots. The company sued Leibovitz last month, claiming she refused to cooperate with its attempts to sell the archive, which Art Capital says is the only conceivable way it will recoup the loan.

When we reported on that suit last month, we mentioned that Art Capital was also mad at Getty Images for announcing what looked like an agency agreement with Leibovitz in March, in apparent violation of the Art Capital deal. What we didn't know at the time was that Art Capital had actually sued Getty in April, claiming that Getty pretended to be interested in buying Leibovitz's photo archive in order to gain competitive advantage in negotiating its own agency deal with her.

According to a judge's order allowing parts of Art Capital's suit to go forward, Art Capital claims that Getty CEO Jonathan Klein and vice president Matthew Butson masqueraded as potential buyers for Leibovitz's photo collection, gaining access to information about it including the "number of shots, rolls of film, exposures, and public works" in the archive, the precise terms of Leibovitz's arrangement with Vanity Fair, and the fact that Leibovitz owned some of her work for Rolling Stone "without restriction." As part of Art Capital's negotiations with Getty, the order says, Art Capital proposed that Leibovitz promise to do eight photo shoots for Getty over the next two years. All-in-all, Art Capital—which made Getty sign two confidentiality agreements—valued the package at $50 million.

But in March, Getty offered a "low-ball bid" of $15 million, and Art Capital stopped negotiations and turned to another buyer. Eight days later, Getty announced its own deal with Leibovitz, which Art Capital says "used verbatim the two-year, eight-shoot collaboration with Leibovitz that [Art Capital] had proposed." In other words, Art Capital claims, Getty violated its confidentiality agreement in order to get closer to Leibovitz and figure out what she had, what she was worth, and what she was willing to do. Getty didn't buy the archive—just the eight shoots—but Art Capital says that Getty's interference scared off another unidentified potential buyer, presumably because the Getty deal appeared to muddy the legal waters as to who was actually representing Leibovitz—and who wants to spend $50 million on pretty pictures when a raft of lawsuits is in the offing?

Interestingly, according to the order, Art Capital was apparently demanding a $1 million loan payment from Leibovitz the week before the Getty deal was announced. And the Getty deal itself apparently paid $1.1 million, which Art Capital contends is "far less than her market rate." So it may be that Leibovitz was desperate for cash to make her payment, which Getty used against her as a bargaining chip.

The reason we didn't know about the suit until now is that Art Capital filed it under seal, and the complaint itself isn't available via the New York Supreme Court's web site (we haven't gone down to the courthouse to check the physical file). What is available, however, is a judge's order allowing two of Art Capital's claims against Getty to go forward and laying out the basics of the dispute. CityFile found it yesterday and linked to it—pointing out that the judge repeatedly misspelled Leibovitz's name. In addition to allowing Art Capital to proceed with claims of breach of contract and tortious interference, the judge denied Art Capital's motion to keep the case sealed, so presumably the full case file will be available soon.

Spokespersons for Getty and Art Capital did not immediately return phone calls.

You can read the order here.