Bankruptcy Judge Grants Philadelphia Orchestra Approval for Labor Agreement
After lengthy negotiations, a federal bankruptcy court judge has approved a new labor agreement between the Philadelphia Orchestra Association board and its musicians’ union. The agreement will last for four years and comes into effect November 1.
In a written order last Thursday, bankruptcy judge Eric Frank confirmed he would approve the deal. Under the renewed terms of the agreement, the number of musicians will be reduced from 105 to 95 through retirements and attrition and musicians’ salaries will be cut by about 15%. At present, the minimum salary for Philadelphia Orchestra musicians is about $125,000 a year.
There will also be amendments to current pension benefits. Presently, the musicians enjoy a guaranteed monthly benefit upon retirement under a defined benefit plan. This will now be changed to a defined contribution plan which shifts retirement planning and investing to workers but doesn’t guarantee a specific amount of money based on years of service. Under the new agreement, the pension change will now go for approval by Pension Benefit Guarantee Corp, a federal agency that insures the pensions of more than 44 million US citizens.
The Philadelphia Orchestra Association board estimates the new agreement will bring about a savings of about $38 million over the four years.
The renowned Philadelphia Orchestra became the first major US orchestra to file for Chapter 11 bankruptcy protection in April this year. The 111-year old orchestra has been facing financial difficulties for a long time due to shrinking attendances, an aging audience, fewer donations, high labor costs and the effects of the recession.
Last month, the bankruptcy judge granted the Orchestra approval to terminate its business relationship with Peter Nero and Philly Pops, which was going on for the last 6 years but which the Orchestra claimed was detrimental to its finances.
But the Orchestra is not out of the woods yet. The next step in reorganization will be to renegotiate terms of its rental agreement with the Kimmel Center. The Kimmel Center says the Orchestra owes it about $1.4 million in unpaid rental.
The developments augur well for the continued running of the Orchestra. Although it is not good enough to meet its initial goal to emerge from bankruptcy by the end of the year, it should be able to do so by early next year.
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Filed under Chapter 7 (Tampa) by on Oct 31st, 2011. Comment. 
Temple Beth Shalom in Corona, California filed for Chapter 11 bankruptcy protection August 2 in an effort to avoid foreclosure of their new synagogue. It is uncertain whether the Temple at California Avenue that belongs to Beth Shalom congregation will remain open or be compelled to vacate the premises.
Temple secretary Sam Miller said the synagogues financial problems stem from the economic recession and a lower than expected growth in number of members. “Before the economy crashed, we would have been in excellent shape. There would have been no problem at all,” Miller said. “We just didn’t get new members as we anticipated. The economy caused people to put their wallets in their back pockets.”
The Temple has seen membership dwindle after several members left the 75 member congregation while others stopped paying their membership dues after hearing that the synagogue might be liquidated. Miller commented, “It’s a very upsetting thing for the membership. We have two members that I’ve talked to right now that are probably leaving because of this. We have a lot of other people that are upset”.
One of the synagogue’s members, Constantine “Dino” Petrovic gave a picture of things when he said, “We had a number of programs at the temple where we would arbitrarily reach out and do random acts of kindness and help the community, but all of that has been cut off because the funding has been cut off. The school hours were cut in half. We lost one of the teachers because we weren’t able to pay. The Hebrew school is two days instead of five.” He added that this has caused low morale among the congregation during the High Holy Days.
Some congregation members were skeptical of whether the synagogue had the financial means to build its $1.5 million temple that included the temple sanctuary, school, office, library and kitchen in a 4,500-square-foot building that opened in April, 2009. “They thought it was risky. It turned out that they were right but for the wrong reasons, the economy crashed,” Miller said. “We got into trouble on this.”
The building project came about when the congregation outgrew its previous building on West 9th and South Sheridan streets. The age of the dingy building was a turn-off to new potential members, so the board sold the property in 2000.
When the new temple was launched, membership doubled but it was not as much as anticipated and by August 2009, were in financial distress. The congregation that originally formed in 1968, is trying to fend off foreclosure with California Bank & Trust, which holds the loan balance of $1.6 million. The bank is trying to push through with the foreclosure.
The temple owes the city of Corona $43,203 through a redevelopment loan. In addition it owes $38,802.96 for 52 cemetery plots. Among their assets is a timeshare in Mexico worth $15,800.
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Filed under Chapter 7 (Tampa) by on Oct 5th, 2011. Comment.
Solyndra, the company the White House highlighted in its efforts to push for cleaner energy technology, has filed for Chapter 11 bankruptcy protection. It has laid off more than 1,000 full-time and part-time workers and increased the Republican’s criticisms of the Obama administration’s initiative in renewable energy.
The company issued a statement Wednesday, citing the global economic recession and weak demand for solar panels had forced it to suspend production at its plant. The company now has to weigh its options in how to reorganize. One option is to find a suitable buyer and to license the technology it uses to manufacture its solar products, which includes a unique cylindrical solar panel that maximizes absorption of the sun’s rays.
The government awarded Fremont-based Solydra a loan guarantee (the first company to be given the guarantee) of $535 million as part of President Obama’s economic stimulus package. The guarantee was issued under the Energy Department’s program in 2009. Then last year, the President visited Solyndra’s plant in California to spotlight the government’s efforts in promoting clean renewable energy. At that time, Solyndra was expanding its business creating jobs for workers making construction materials to build a new factory and assembling parts for solar equipment.
But what a difference a year makes. The company ran into cash flow problems and the Energy Department had to restructure the loan earlier this year. Also, a planned public offering that was set for June this year had to be cancelled.
Although the company experienced strong growth in the first half of this year, it was insufficient to enable it to scale up to full operations, which would have allowed it to compete with larger foreign manufacturers. In its statement, the company said, “This competitive challenge was exacerbated by a global oversupply of solar panels and a severe compression of prices that in part resulted from uncertainty in governmental incentive programs in Europe and the decline in credit markets that finance solar systems”.
Among a chorus of critical voices in the House were those of House Energy and Commerce Committee Chairman Fred Upton (R-MI) and panel member Rep. Cliff Stearns (R-FL) who stated that the loan guarantee was a “bad bet for taxpayers from the beginning”.
The Committee is investigating the details of the loan guarantee. In June, the Committee subpoenaed the White House Office of Management and Budget for documents about the loan guarantee, which came on condition that Solyndra would step up its operations and hire 1,000 more workers. The Committee is generally of the opinion that the government was “in the rush to get stimulus cash out the door,” and made a poor choice of the company to be awarded the loan guarantee.
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Filed under Chapter 7 (Tampa) by on Sep 1st, 2011. Comment.
Winery and vineyard operator Russian River Vineyards has filed for Chapter 11 bankruptcy protection at US bankruptcy court in Santa Rosa. According to bankruptcy papers, the company has assets and liabilities between $1 million and $10 million.
The winery’s present owners bought over the operations in 2008 and have struggled with reducing its debts ever since. Managing partner Chris O’Neill said, “When we took over a little over two years ago, it was basically out of business, and it was in foreclosure. We incurred a lot of debt in those first 18 months, and we just weren’t able to get out from under that.” O’Neill assured creditors they would receive every cent back of whatever is owed them. The owners are O’Neill and partners Barbara Sattler, Giovanni Balistreri, Anthony Austin and Debra Del Fiorentino.
The winery and its restaurant, Corks, will continue operations while the restructuring of debts and other bankruptcy procedures are carried out. It is expected that the bankruptcy will help Russian River Vineyards to pay off their debts in a more organized manner. In total the winery and restaurant employ 35 workers.
Due to its initial debts the present owners found it difficult to turn things around. According to Mario Zepponi, a winery merger and acquisition specialist in Santa Rosa, “unless you have a lot of cash reserves to start over with a brand, it’s really a difficult proposition to make it succeed.” Zapponi went on to say, “They’re going to still need assistance from either investors or a joint venture partner or a buyer, to go ahead and get into the clear. (But) I don’t think it’s symptomatic of what’s going on in the industry as a whole.”
The winery resembles a cross between an old hop kiln and the stockade built by Russian immigrants at Fort Ross. According to its website, Russian River Vineyard is the one of only five wineries in the country with its own attached restaurant. The reason is that these days, zoning rules generally disallow commercial businesses on agricultural land.
In 1987, the winery was certified organic and its most famous feature is the hundreds of bats that come out every night to feed on insects in the vineyard. The vineyard processes chardonnay, pinot noir and other wines and charge between $14 and $82 per bottle. Its production capacity is about 2,000 cases of wine each year.
The company’s revenues increased from $600,000 in 2009 to $800,000 in 2010, and should increase to $1.2 million this year. Russian River Vineyard is owned by Sonoma Vineyards Acquisition LLC.
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Filed under Chapter 7 (Tampa) by on Aug 17th, 2011. Comment.
The famed Crystal Cathedral in Garden Grove, Orange County filed for Chapter 11 bankruptcy protection in October last year under the weight of $50 million in debts. Now the bankruptcy court is overseeing the sale of the church’s elegant 10,000 panel glass building for which two opposing bids have been received. The first one is from the Roman Catholic Diocese of Orange that has made a bid for $53.6 million while the second bid was received from Chapman University that is affiliated with Disciples of Christ Protestant denomination. The university bid $50 million, the minimum bid that creditors would consider.
However, the university would allow Crystal Cathedral to buy back the premises and other buildings for $27.5 million, if it can raise the funds to do so. At the same time, the university is prepared to lease space in the cathedral back to the church for its activities.
The Catholic diocese is also willing to rent space back to the Cathedral’s ministry, but only temporarily as it intends to use the cathedral as a new church for its own congregation, numbering about 1.2 million, in three years’ time. The diocese feels buying the Cathedral is more cost-effective than its original plan to build their own facility from scratch.
Chrystal Cathedral had its humble beginnings when its founder, Reverend Robert Schuller and his wife Arvella held meetings in a rented Orange county drive in back in 1955. Since then, Reverend Schuller has become an internationally famed televangelist and started the program for which he is most well known, The Hour of Power. Reverend Schuller officially retired as senior pastor in 2006.
The creditors’ committee on Tuesday filed court papers outlining its plans for resolving the case and detailing the offers received to buy the cathedral.
According to court papers, other bidders for the building include Hobby Lobby, an arts and crafts retailer controlled by an evangelical executive, David Green who have also made bids of about $50 million.
But the cathedral’s ministry is determined not to sell the building and has initiated a pledge campaign to raise funds to pay off creditors. Needless to say, some of the creditors are not altogether pleased with this move.
Sheila Coleman, daughter of Reverend Schuller and director of ministry at Crystal Cathedral, said, “I believe with every fiber of my being that God turned the eyes of the world on Crystal Cathedral because God wants to make a big bold statement. He wants the world to know that he is a God who still does miracles.”
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Filed under Chapter 7 (Tampa) by on Aug 11th, 2011. Comment.
