April 18, 2011 1:08 PM
Philadelphia Orchestra Plays Funeral Dirge
Posted by Brian Baxter
UPDATE: 4/18/11, 3:35 p.m. Information from a Morgan Lewis spokeswoman has been added to the fifth paragraph of this story.
The Philadelphia Orchestra, one of America's top five orchestras, became the first major U.S. symphony to file for bankruptcy when it began Chapter 11 proceedings over the weekend. The orchestra's board of directors voted on Saturday in favor of declaring bankruptcy, following a failure to close an annual operating deficit that has increased in recent years.
Founded in 1900, The Philadelphia Orchestra is considered one of the nation's most prestigious. Once known as the Fabulous Philadelphians, the orchestra performed pieces for the soundtrack of Walt Disney's Fantasia. The orchestra also was the first to appear on national television in 1948 and the first to stream a concert over the Internet in 1997, according to news reports.
But not everyone is supporting The Philadelphia Orchestra's bankruptcy filing.
The Philadelphia Inquirer reports that as board members of the Philadelphia Orchestra Association filed into the lobby of Morgan, Lewis & Bockius--firm counsel Alan Reed is a board member--on Saturday, a string quartet opposed to the bankruptcy serenaded them with Schubert and Mozart. (Click here for a picture of that scene.)
Morgan Lewis spokeswoman Frances Bravo says that the orchestra's board has roughly 50 members and that the firm's offices were a convenient location logistically to host the meeting and link in other individuals by phone who could not attend. Bravo says that Morgan Lewis offered its services to the orchestra free of charge--the musical body has been a pro bono client of the firm.
Musicians believe that Chapter 11 will harm the fancy band's reputation and potentially lead to layoffs and pension fund cuts, according to The Inquirer, which has the full story on how the venerable orchestra found itself in Chapter 11. University of Pennsylvania bankruptcy law professor David Skeel told the paper that the orchestra has no debt and that its $140 million endowment could offset its $14.5 million structural deficit cited in court filings.
Dilworth Paxson bankruptcy and insolvency cochair Lawrence "Larry" McMichael is advising the orchestra in its Chapter 11 case. Court filings by the firm show that it has received $319,307 from the debtor in the 90 days prior to its Chapter 11 petition. McMichael is billing the orchestra at $750 per hour, litigation partner Christie Comerford at $440, and bankruptcy partner Anne Aaronson at $410, according to court records.
Joseph Jacovini, a corporate partner at Dilworth Paxson and the cochair of the firm's government contracts practice, was acting chairman of the board for The Philadelphia Orchestra from December 2008 to September 2009. Labor and employment firm Curley, Hessinger & Johnsrud is also serving as special counsel for labor negotiations to The Philadelphia Orchestra during its Chapter 11 proceedings, but the firm has not yet filed billing statements with the bankruptcy court.
According to a list of the orchestra's 30 largest unsecured creditors, the classical music combo now in Chapter 11 owes $51,942 to Cozen O'Connor. Former U.S. ambassador to Austria David Girard-diCarlo, who joined Cozen two years ago, was named a new board member of the orchestra last October. Cozen of counsel Nelson Diaz has also served on the board.
While The Philadelphia Orchestra is the largest symphony to seek Chapter 11, other orchestras have also faced financial difficulties in recent months. Instruments once owned by the now shuttered Honolulu Orchestra were scheduled for sale at a bankruptcy auction in March, while the board of the Syracuse Symphony Orchestra voted to close and suspend operations last month.
The Detroit Symphony Orchestra canceled its season because of a six-month strike by musicians that concluded in early April. In December, the Louisville Orchestra filed for bankruptcy just weeks before its seventy-fifth anniversary. Louisville firms Valenti Hanley & Robinson and Greenebaum Doll & McDonald are advising their local orchestra in that case.
Bloomberg reports that many classical music and opera companies have been struggling with shrinking donations and sagging attendance. The Baltimore Opera closed in 2009 and the New York City Opera is projecting a deficit for its fourth consecutive season, according to Bloomberg.Make a comment