Philadelphia Orchestra Emerges From Chapter 11 Bankruptcy

Philadelphia, PA- The 111 year-old Philadelphia Orchestra announced Tuesday that they have emerged from reorganization.

According to the Sacramento Bee, the Philadelphia Orchestra Association announced they addressed over $100 million in debt which they settled for $5.5 million under Chapter 11.

The Philadelphia Orchestra declared bankruptcy last April becoming the first major American orchestra to take such a measure. Like many other businesses and municipalities, the orchestra had to file for debt protection because of strangling pensions along with declining ticket sales and donations.

In a prepared statement, president and chief executive Allison Vulgamore said, “There is much critical diligence and much fiscal capitalization to be achieved for the orchestra. And we embrace this new era –and our audiences – with gratitude and dedication.”

The orchestra, in order to return to solvency has to reduce its size from 105 musicians to 95 and had to cut their salaries by 15 percent. The Kimmel Center also gave them a break on their rent

Chapter 11 bankruptcy is most often employed by businesses that have a great deal of debt or liabilities, but don’t have enough assets to pay off their creditors. Under this plan, the business can keep enough capital to keep the business running and pay necessary employees, but other assets will go to their creditors. The exact amount the bankrupt company must pay creditors varies but it is often less than they owe.

Any business owner considering bankruptcy should first speak with a bankruptcy attorney to see of this is filing will be right for them.