June 28 (Bloomberg) -- The Philadelphia Orchestra Association, the symphony featured in Walt Disney’s “Fantasia,” won court permission to exit bankruptcy after cutting musicians’ salaries and benefits by about $4 million a year, the orchestra’s attorney said.
The 112-year-old symphony has already raised the $3 million needed to pay debts tied to its bankruptcy, allowing it to leave court protection sometime next month, Lawrence G. McMichael, with the Philadelphia law firm Dilworth Paxson LLP, said in an interview today.
“We passed the hat around the community and we got people to donate,” McMichael said.
Orchestras across the U.S., including the seven biggest, have been cutting costs to balance the quality of their programs with what the local communities can afford. Philadelphia’s is the largest orchestra to file bankruptcy.
Leaving bankruptcy will make it easier for the orchestra to raise the $5 million needed for normal operations this year, McMichael said. Orchestras, including Philadelphia’s, typically rely on donations in addition to ticket sales to pay expenses.
While in bankruptcy, the orchestra eliminated all its debt and reduced expenses by $6 million a year. In addition to the labor savings, the orchestra will pay about $1 million less in annual rent for its main performance space and save about $1 million a year after ending its relationship with the Philadelphia Pops, another orchestra.
The orchestra filed for bankruptcy one year ago in Philadelphia, partly because of the high cost of musicians’ pensions, according to court papers. Two smaller orchestras, in Louisville, Kentucky, and Syracuse, New York, also filed for bankruptcy amid falling attendance and donations.
Philadelphia is among the seven biggest U.S. orchestras, measured by budget, according to Judith Kurnick, spokeswoman for the League of American Orchestras. The others are based in New York, Boston, Los Angeles, San Francisco, Cleveland and Chicago.
Under conductor Leopold Stokowski, the orchestra recorded the music for Disney’s 1940 animated movie, Fantasia, the first feature-length film devoted to celebrating classical music.
The case is In re The Philadelphia Orchestra Association, 11-13098, U.S. Bankruptcy Court, Eastern District of Pennsylvania (Philadelphia).
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