Although the Philadelphia Orchestra filed a Chapter 11 petition with U.S. Bankruptcy Court on Saturday, it does not mean the orchestra has dissolved.
The organization continues to operate and the musicians continue to perform.
It also does not mean the orchestra is necessarily broke.
A representative of the orchestra’s management said there is only enough cash to operate until June. But the orchestra is sitting on a mountain of assets, including a $140 million restricted endowment.
“I can appreciate the challenge of seeing that money,” said orchestra president Allison Vulgamore. “Thank goodness it’s there–it’s the future we have to live off of. If we take that money now, we don’t have annual money to keep going.”
The orchestra may have to defend the sanctity of that endowment to the bankruptcy judge. Creditors could challenge the orchestra’s petition.
“Any party in interest–anybody they owe money to–could file a petition with the court and say the bankruptcy should be dismissed as a bad-faith filing,” said bankruptcy attorney Barry Bressler of the firm Schnader Harrison Segal and Lewis. “If by dipping into their assets they could pay their bills as they mature, rather than go through a reorganization proceeding.”
Bressler is not involved with the orchestra’s petition.
While any of the orchestra’s contractors and creditors can contest the bankruptcy filing, a spokesman for the musicians say they have no plans to do so.