Banks call for repayment of $54 million Detroit Symphony loan

Posted on: February 4, 2011

In Thursday’s (2/3) Detroit News, Daniel Howes writes, “The Detroit Symphony Orchestra has a bigger problem than the 18-week-old strike that has marred the classical music season, alienated donors and disappointed subscribers. The orchestra’s lenders, in an ominous turn, repaid the orchestra’s bondholders on Dec. 1 and called a $54 million loan the symphony cannot pay. The move essentially sets up a high-stakes game of chicken between the orchestra’s directors, the musicians and the lenders, who aren’t likely to renegotiate the loans without a realistic labor agreement and an aggressive turnaround plan. … The transaction, completed by a five-bank consortium that includes JPMorgan Chase, Comerica and Bank of America, exchanges bonds set to mature in 2030 for debt controlled directly by the banks. The change moves the DSO one large step closer to a bankruptcy filing with existential implications for the organization, the musicians, the management and the future of world-class music in Metro Detroit. … Wednesday, the DSO’s directors said in a statement that management was preparing another contract offer to the striking musicians—perhaps a final one before a self-imposed deadline of next Friday to decide whether to cancel the remaining season.”

Posted February 4, 2011