Prized Dance Studio in Lower Manhattan Files for Bankruptcy Help
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Prized Dance Studio in Lower Manhattan Files for Bankruptcy Help

June 17, 2013

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Dance New Amsterdam, a major dance studio in Lower Manhattan, has decided to file for Chapter 11 bankruptcy after several years of financial hardship, according to a report this week from the New York Times.

But the dance studio, which has provided performance space for more than 30,000 dancers and 700 dance companies, plans to keep its doors open during the bankruptcy process, according to sources.

The decision to file for bankruptcy comes at a desperate time for the studio, which has struggled for years with low cash flow, the loss of a key rental partnership, and lagging donations from supporters of the arts.

The decrease in donations coincided with the recent recession, which prompted many arts patrons to tighten their wallets, and led directly to Dance New Amsterdam’s struggles to pay its rent.

And the city has faced the threat of eviction for several months, despite a recent deal with Fram Realty, the studio’s landlord, which agreed to significantly reduce the company’s $70,000 monthly rent.

The reduction, however, has not reduced the financial pressure on Dance New Amsterdam, which is why the iconic dance studio decided to call a bankruptcy attorney.

Chapter 11 bankruptcy "provides us with the time to solidify agreements with new partners, increase funding and most importantly, continue to serve the New York City’s vibrant community of performing artists and avid cultural supporters," said Catherine Peila, the studio’s director.

Peila also emphasized that Dance New Amsterdam plans to "continue its daily operations, and to implement a five-year recovery plan with its partners, city officials, and its landlord."

During a recent interview, Peila reportedly admitted that the studio was driven to bankruptcy because it she and her executive team were simply “unable to pay our operating expenses.”

Indeed, the company’s finances are something of a mess, as it owes $4.5 million in debt, but only has an annual budget of roughly $2.5 million, according to reports. But the future looks promising, as the studio has already presented a bankruptcy plan to the trustee.

According to sources, the studio is looking to negotiate a new lease, eliminate some of its debts, and reduce its operating expenses each year by more than $1 million.


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