May 9 (Bloomberg) -- The Philadelphia Orchestra Association is keeping money from tickets sales for next season’s concerts in escrow in case the bankrupt symphony owner must cancel performances, an attorney said in court today.
Larry McMichael, an attorney for the association, said the 111-year-old orchestra expects to put on its next regular season, which starts in October. The escrow account was arranged should the orchestra, which says it has a $14 million deficit, issue refunds to its annual subscribers and other ticket buyers, McMichael told U.S. Bankruptcy Judge Eric Frank.
“I can’t think of any scenario where we are not going to have a season,” McMichael said in an interview. “At the same time, we want to be very careful with our subscribers’ money. People know they can subscribe now and they are going to get their money back should something happen.”
The Philadelphia Orchestra is the first major symphonic orchestra to file bankruptcy in the U.S., according to lawyers involved in the case. The association blamed the bankruptcy in part on the high cost of musicians’ pensions and said in court papers that it must renegotiate their labor contract.
The association is also locked in a dispute with Grammy-winning pianist Peter Nero, artistic director of the Philly Pops orchestra. Days before the orchestra’s bankruptcy filing, Nero won an arbitration case against the association.
The association wants to cancel its participation in the Philly Pops because the annual series of concerts costs it at least $600,000, Richard B. Worley, chairman of the orchestra, said in an interview.
The Philly Pops 2011-2012 season has not yet been scheduled because of the dispute. The last of the Pops concerts are scheduled to take place this month.
The case is In Re The Philadelphia Orchestra Association, 11-13098, U.S. Bankruptcy Court, Eastern District of Pennsylvania (Philadelphia).
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