July 17, 2012
By: John Clark
After making history by becoming the first major U.S. orchestra to file for bankruptcy, the Philadelphia Orchestra Association is wrapping up its bankruptcy process after more than a year in court, according to a report from the Philadelphia Inquirer.
Last week, U.S. Bankruptcy Court Judge Eric Frank granted his seal of approval to a reorganization plan that would allow the orchestra to exit bankruptcy court by the end of this month.
As part of the bankruptcy plan, which was reached after nearly 15 months of negotiations with several creditors, the court will distribute roughly $5.5 million to creditors based on their seniority.
And sources say the plan faces no significant opposition from the group’s lenders. Sources are optimistic that the agreement will allow the orchestra to continue its operations. In Judge Frank’s opinion, the orchestra’s collapse would have been "a great loss for Philadelphia, the region, and the music world."
The judge also noted that the orchestra "is an important cultural and civic institution," and he expressed his hope that the restructured debt payment plan would allow the orchestra to "continue to perform for audiences for many years to come."
In a fitting end to the group’s long trek through bankruptcy court, when the judge announced the completion of the bankruptcy, the orchestra’s attorney led board members and musicians in a hearty, rhythmic round of applause.
The communal round of applause was a cordial end to what sources say was a very contentious process, as the board of directors for the orchestra sought serious concessions from musicians in order to solve the debt crisis.
According to the Philadelphia Inquirer, during bankruptcy, the orchestra negotiated a 20 percent pay cut from musicians, reduced its future pension obligations, and secured a more favorable lease from the owner of its primary venue, Verizon Hall.
And while the bankruptcy process reportedly took a bit longer than the orchestra expected, and led to the accumulation of almost $10 million in fees, the orchestra managed to achieve it primary objectives, sources say.
In the words of orchestra chairman Richard Worley, the bankruptcy filing amounted to "an incredible effort on the part of many" members of the orchestra’s extended family.
PAID ATTORNEY ADVERTISEMENT: THIS WEB SITE IS A GROUP ADVERTISEMENT AND THE PARTICIPATING ATTORNEYS ARE INCLUDED BECAUSE THEY PAY AN ADVERTISING FEE. It is not a lawyer referral service or prepaid legal services plan. Total Bankruptcy is not a law firm. Your request for contact will be forwarded to the local lawyer who has paid to advertise in the ZIP code you provide. Total Bankruptcy does not endorse or recommend any lawyer or law firm who participates in the network nor does it analyze a person's legal situation when determining which participating lawyers receive a person's inquiry. It does not make any representation and has not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The information contained herein is not legal advice. Any information you submit to Total Bankruptcy does not create an attorney-client relationship and may not be protected by attorney-client privilege. Do not use the form to submit confidential, time-sensitive, or privileged information. All photos are of models and do not depict clients. All case evaluations are performed by participating attorneys. An attorney responsible for the content of this Site is Kevin W. Chern, Esq., licensed in Illinois with offices at 25 East Washington, Suite 400, Chicago, Illinois 60602. To see the attorney in your area who is responsible for this advertisement, please click here, or call 866-200-8052.
FLORIDA ONLY: Total Bankruptcy is considered a lawyer referral service in the state of Florida under the Florida Rules of Professional Conduct. By all other standards, Total Bankruptcy is a group advertisement and not a lawyer referral service.
If you live in Mississippi, Missouri, New York or Wyoming, please click here for additional information.
By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.