As reported by Philly.com and several news outlets, the Philadelphia Orchestra’s recent bankruptcy filing, while drawing attention both nationwide and worldwide, will not yet prevent the orchestra from performing.
The Philadelphia Orchestra made the decision to declare bankruptcy on April 16, 2011.
A popular music blogger in London, Norman Lebrecht, wrote, “Philadelphia – it’s the worst outcome, it foments uncertainty across musical America.”
The former Governor of Philadelphia, Ed Rendell, felt that as long as the orchestra continues to perform its schedule, that the news wouldn’t be viewed as a negative stain on the city.
When Rendell was mayor he wanted the orchestra to move to the Kimmel Center for the Performing Arts. The orchestra has blamed some of their debt on the cost of their rent since the move.
Other debts cited include money that was lost on concerts, high labor costs and donations slowing down.
According to court papers, the orchestra has an endowment valued at $116 million.
Rendell said, “Nah, I don't think it matters if the orchestra continues performing. If they stopped performing, that would be something different. I think everyone understands . . . that the country is going through tough times, and individual and corporate giving is significantly reduced. Virtually every orchestra everywhere is dealing with the same issues.”
The Chapter 11 claim by the Philadelphia Orchestra Association was scheduled for April 20, 2011 in U.S. Bankruptcy court in the Eastern District of Pennsylvania.
Both the orchestra and the orchestra’s related business, the Academy of Music and Encore Series Inc. – the latter operates the Philly Pops – have been assigned to Judge Eric L. Frank.
Judge Frank has a long history as a veteran bankruptcy specialist.
Those principally involved in the bankruptcy believe that it will take a matter of months to settle. By the end of the calendar year, it is speculated, the orchestra will emerge from its bankruptcy.
Mayor Nutter said, “The most recent situation is the most complicated and challenging I think they have ever faced. This is a very, very important issue to the city, and we're going to focus on this because the Philadelphia Orchestra is vitally important to the spirit and lifeblood and quality of life in Philadelphia and the Philadelphia region.”
Nutter stated that his role will be both “appropriate and active” in executing the recovery plan. He also said that he would be making visits to potential donors in his efforts to assist the orchestra.
Per industry veterans, Philadelphia is the first major U.S. orchestra to declare bankruptcy in recent history, or possibly, ever. This information, coupled with the prestige and history of the Philadelphia orchestra, makes it somewhat shocking for those watching trends in bankruptcies.
Musicians may be making concessions, and there is speculation that orchestra managements are sharing strategies.
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