Arts and cultural organizations are not immune to the economic impacts of the recent Great Recession. Falling attendance and rising costs of real estate, overhead and administration marked the decline of many museums, galleries and theatrical venues in recent years.
This same scenario appeared to be problem for the Philadelphia Orchestra, long considered one of the best in the country. This month, the world-renowned group filed for Chapter 11 bankruptcy protection—an apparent first in recent history for a major American orchestra.
According to a report by The Huffington Post, “Board chairman Richard Worley said members made a nearly unanimous vote Saturday to file for reorganization in a federal bankruptcy court in Philadelphia after a "long meeting, thoughtful meeting, emotional meeting. ‘We're running low on cash, we're running a deficit, and we have to put ourselves in a position to attract investment funds to help us,’ Worley told reporters. Allison Vulgamore, president and chief executive officer, also cited a ‘tremendous decline’ in audiences over the past five years. Officials stressed, however, that concerts would go on as scheduled, including the evening's performance of a Mahler symphony. And they said a revitalization campaign was planned to increase revenues by about two-thirds and bring in new art and audiences.”
Other nonprofits have faced the same challenges, including smaller orchestras in cities such as Syracuse and Honolulu—both forced to file for bankruptcy in the wake of the country’s economic meltdown. What sets the Philadelphia orchestra apart is that it represents the first major metropolitan orchestra, since at least as far back as 1986, to seek out the safe havens of Chapter 11 bankruptcy.
The Philadelphia Orchestra bankruptcy can also be seen as a case study in how a Chapter 11 filing can help many companies, as well as nonprofit organizations, adapt to a changing economic landscape following our recent Great Recession. In the wake of the housing crisis, lingering consumer skittishness, drops in tourism and trade, and other economic woes, many industries have faced financial challenges, taking the businesses and organizations that serve them right along with it.
Whether you build houses or make beautiful music, if your specific industry has been affected by the economic downturn, Chapter 11 can buy you the time to reorganize the way you do that business and get back to making better financial decisions. And buying you time to tweak your business model is part of what Chapter 11 is all about: diminishing debt while you save your means to profit….even if you’re a non-profit.
So, are you an active businessperson or nonprofit founder who is considering a new chapter for your business or organization through the benefits of a Chapter 11 bankruptcy filing? Or are you an average American reading about the benefits of bankruptcy and want to learn more about how these types of benefits can actually benefit you?
Well, first and foremost, when you are seeking the broad protections of bankruptcy, it’s best to consult with a qualified attorney before filing. A qualified bankruptcy attorney is important during the bankruptcy process to help you navigate any uncertain waters and work in your best interests throughout the duration of the case, regardless of your status. The bankruptcy attorneys at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to +1-919-646-2654, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.