Now that Leibovitz is undeniably in default on the loan, it seems like declaring bankruptcy is her only option. And even if she doesn't want to do that, Art Capital seems ideally situated to force her into bankruptcy. But to judge by Art Capital's silence and Leibovitz's hopeful noises about "resolv[ing] this matter," it looks like neither party wants bankruptcy. Why not?

One reason can be found in this interview Reuters' Felix Salmon conducted with Art Capital's CEO Ian Peck back in June, in which Beck revealed his fear of what bankruptcy judges can do to his finely calibrated deals:

Peck is pretty puritanical about bankruptcy — he won't lend to people who have declared bankruptcy in the past, and he's afraid of what might happen to his liens in bankruptcy court, so he wants to avoid that if at all possible.

Right now, Peck can claim ownership over Leibovitz's photo archive, which he values at $50 million, and her homes in Rhinebeck, N.Y., and Greenwich Village, as well as 12 percent interest on the loan and 25 percent commission on the sale of the archive. If she files for bankruptcy, a judge could muck around with those numbers, reduce the interest rate, and cut him out of the commission. That sort of uncertainty is what he means when he says he's "afraid of what might happen to his liens." So if Leibovitz actually appears to be making movement toward finding an angel to help refinance the deal and pay off Art Capital everything it's entitled to, Peck might prefer to give her some time to work it out over throwing the bankruptcy switch and putting everything in the hands of a judge. Who might that angel be? Goldman Sachs is one of the financers of the Art Capital loan, and it has said it would like to find a way to refinance and help Leibovitz escape Art Capital's clutches.

But there is an upside to bankruptcy for Art Capital: it would free them up to sell the archive. It's important to note that, according to the terms of Art Capital's loan, it is already entitled to sell the archive and the homes right now, and has been for some time. There are two potential reasons that it hasn't: Either no buyer would plunk down the cash for the rights to the photos when the deal is surrounded by litigation, or Art Capital vastly overestimated the value of the archive and no bidder will come near the price that Art Capital needs to recoup the loan. If it's the former, bankruptcy would clean up the legal mess and allowing Art Capital to sell it by offering any buyer a free and clear title on the archive.

But there's another way to clear up the legal mess: Clear up the legal mess! If Leibovitz and Art Capital can come to terms and settle their claims and sell the archive outside of bankruptcy, both could benefit—Leibovitz wouldn't be bankrupt, and Art Capital would get everything it thinks it's owed. Alternatively, if Goldman Sachs or someone else is stupid enough to come along and take over the loan and pay off Art Capital enough to make it happy, then everybody still wins.

A potential monkey wrench would be if one of Leibovitz's other creditors files a petition for involuntary bankruptcy against Leibovitz before she and Art Capital can work it out — and we know that at least one creditor has been contemplating such a move for months.

The Huffington Post's Jason Linkins reflected on what Robert Novak's death meant to him.

Reuters' Felix Salmon reveled in his immunity from the AP and Bloomberg social media policies.

Gothamist's Jake Dobkin decided he'd investigate this second amendment he's heard so much about lately.

Lindsay Robertson lamented the tyranny of the news cycle.

The New York Times instructed Jennifer 8. Lee to take "the dog days of summer" literally.

Did you witness the media elite tweet something indiscreet? Please email us your favorite tweets - or send us more Twitter usernames.

See, fancy, expensive journalism schools are basically like overdraft fees and lottery tickets—a way to raise free, unlimited amounts of money from dumb people. And you needn't provide anything in return!

And also, this is why journalists are terrible at covering money and finance.

I think it's fair to say that going to journalism school increases your chances of getting a job in journalism. If J-school graduates are almost by definition financially naive - if they weren't financially naive they'd never have spent so much money on J-school - then maybe J-school is only serving to increase the number of innumerates working in journalism. Which is a sobering thought.

Ok, but why are financially literate writers not only shitty at but also generally uninterested in actually explaining things clearly to us dumb lay people? (Besides you, Felix!)

More fuckery at Viacom? Not hard to believe! We've heard two new Viacom rumors today: First, we hear that another round of staff layoffs at Viacom is happening this week [Email us if you know more]. Second, a tipster tells us that MTV has created a fun new way to stick it to vendors:

MTV Networks is currently withholding millions of dollars from vendors after a debacle with "InvoiceWorks," their new method for third party vendors to invoice. It's a giant mess. They've changed their standard net payment from 30 days to 60 days without giving notice to vendors. All sorts of companies are owed money by MTV. Edit facilities, production companies, on-air talent, office supply companies, caterers, you name it.

Portfolio.com finance blogger Felix Salmon, a recession winner, is leaving the leaky Conde Nast ship for a new gig as some sort of opinion blogger for Reuters. Anybody who can get a job these days must know something about something!


Jay Carney, former Time Washington guy-turned Joe Biden flack, claims in a new interview that he wasn't "swept up in Obamamania." YEA RIGHT CARNEY. Just admit it. Other than that the interview is total fluff.


Success: Kid goes to school, gets a degree in journalism, and finds a job in the journalism field! He's delivering newspapers. Cannot believe we left 'paperboy' off our list.

Heartbreaking rumor of the day: a tipster tells us that Sesame Workshop, "the nonprofit organization behind Sesame Street and so much more," is laying off a fifth of its workforce, something like five dozen people. Among the departed are Grover and the "Big" in "Bird." [Not really. Email us with details or denials on this.]
UPDATE: My mistake, this wasn't a "rumor" after all: "The company said Wednesday that it's eliminating 67 of 355 staff positions."

One thing I've noticed in my years blogging is that your most popular posts are never your best posts, and that it's pretty much impossible to predict which posts are going to catch on and get lots of pageviews. The new Gawker pay scheme, then, might well end up simply rewarding the lucky, rather than the good.

Portfolio's executives are playing up their differences. For example, in a converted 11th-floor conference room, a place [publisher David] Carey likes to call his "idea lab," black leather couches from Design Within Reach are accessorized with throw pillows. On one side of each pillow is the gray pinstripe often used in Portfolio's branding; on the other, fuchsia satin is meant to signify luxury and includes a corner strip of the magazine's logo. "[Advertisers] come here, admire the pillows, and by the time they get back to the office, there's one waiting for them," said Carey proudly.

Open For Business... [WWD]
In a Troubled Time, a New Business Magazine [NYT]
Conde Nast's Portfolio's Deep Pockets [ABC]
Magazine Wars [NYP]