Floundering New York City Opera Files for Chapter 11 Bankruptcy
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Floundering New York City Opera Files for Chapter 11 Bankruptcy

October 28, 2013

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The floundering New York City Opera, which has been in business for 70 successful years, is looking for bankruptcy help, according to a report from The New York Times.

The struggling opera company launched a fundraising campaign to secure at least $7 million in emergency funding last month, but the appeal fell woefully short, according to sources covering the company’s collapse.

In its bankruptcy petition, which was filed in the U.S. Bankruptcy Court for the Southern District of New York, the opera company said it had debts worth $5.6 million. A significant portion of the debt is attributable to hefty pension obligations owed to former employees.

The company, however, still has assets worth roughly $7.7 million, although this figure includes some donation pledges that have yet to be received, according to reports.

In its petition, the company also acknowledged that its endowment was still worth a few million dollars, and it told the court it would not withdraw funds without the court’s permission.

The endowment could pose a tricky legal challenge for the bankruptcy court, as there may be some restrictions on the fund that could complicate creditors’ attempts to reach the assets.

Sources say the bankruptcy filing could represent the end of an opera that was described in court papers by its general manager George Steel as “one of America’s pre-eminent cultural institutions.”

Sources say the company’s endowment was once worth $55 million, but is now worth less than a tenth of that, which shows how rough the last few years of economic turmoil have been on the opera company.

According to Steel’s comments in court papers, the bankruptcy filing was made necessary by the opera’s “lack of liquidity, pension obligations and the many other issues listed” in the bankruptcy petition.

According to reports, the company’s largest creditor, after its pensioners, is the New York City Ballet, which has a $1.6 million claim against the company. The two outfits used to share the same space at the Lincoln Center, but the opera backed out of the deal in 2011.


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