The Please Touch Museum in Philadelphia has filed for bankruptcy.
The children’s museum in the Centennial District of Fairmount Park has already reached a settlement with its bondholders of a $60 million debt.
“In order to implement the settlement, we filed for reorganization under Chapter 11,” said CEO Lynn McMaster. “Because the bondholders have already agreed to the terms, we expect the process to proceed smoothly. The process we’re going through is really to reorganize the debt.”
She said the bankruptcy proceedings could be wrapped up by Christmas.
The museum took on an enormous debt when it moved into Memorial Hall in 2008. Two years ago it defaulted on its loan payments and started negotiating with debt holders about what to do about it.
Nevertheless, McMaster says the operating budget is solid.
“The real albatross that’s around our neck is the debt,” said McMaster. “Our operating revenue is really pretty extraordinary. Eighty-five percent of our operating revenue comes from earned revenue. We can play our bills. Our challenge is we have this debt looming over us.”
The debt has affected the museum’s ability to fundraise from donors and foundations. McMaster is launching a campaign to raise ten million dollars, some of which will go toward the Chapter 11 settlement, and some for future programming and exhibition updates. The museum will remain open for business.