The Philadelphia Orchestra has cleared a major hurdle in its bankruptcy proceeding.
A previously negotiated agreement between the orchestra’s musicians and its administration has passed muster with Judge Eric Frank, who ruled that the three pension funds that had been in place for musicians and staff can be switched to a government-run plan.
But there is still a claim for $35 million, filed by the former pension fund, the American Federation of Musicians and Employers.
“By the end of the year, the orchestra will be out of all three pension plans and will no longer have any financial obligations to those plans,” said orchestra lawyer Larry McMichael. “The bankruptcy will go on, and those plans have claims in the bankruptcy we will have to deal with. But that doesn’t affect the ongoing operations of the orchestra.”
The musicians’ committee considers the new pension fund a sacrifice, as it will reduce the amount of money for retired players.
The next challenge in the bankruptcy proceeding is negotiating a lease agreement with the Kimmel Center. McMichael said they have been talking about the possibility of a merger of the two organizations.