Philadelphia Orchestra asks for loan for operating costs during bankruptcy

Posted on: September 30, 2011

Thursday (9/29) on the Philadelphia Inquirer blog Arts Watch, Peter Dobrin reports, “The Philadelphia Orchestra Association is seeking a loan to help fund operations through the end of its bankruptcy case. The Association has applied to U.S. Bankruptcy Court for permission to assume $3.1 million in debt to pay operating costs, including salaries and vendor bills. ‘Unless these expenses are paid, the Debtor will be forced to cease operations, which would likely result in irreparable harm to its organization and jeopardize the Debtor’s ability to reorganize and maximize value for all interested parties,’ the Association states in papers filed Wednesday. … The proposed loan, from Sun Federal Credit Union, comes with an interest rate of 7¼ percent (9¼ percent if the Association defaults or moves to chapter 7 bankruptcy), and closing costs of $15,500. The loan would likely be repaid in several months. As collateral, the Association would put up its musical instruments and orchestral library of scores and instrumental parts, property, among other tangible and intangible possessions.”

Posted September 30, 2011