Pension Fund Says Orchestra Reorganization Plan Unworkable Without Contract
Attorneys for a Louisville Orchestra musicians' pension fund say the lack of a contract for the next season is reason enough for a bankruptcy judge to reject the orchestra's reorganization plan.The judge is set to rule on the plan Monday. It calls for the orchestra to continue operating with revenue coming from donations, grants and ticket sales. But the fund says that's unreasonable, given the fact that the season starts next month and there is no contract in place for the musicians to play.The fund attorneys also say the orchestra owes $3 million in penalty fees if it reorganizes without a contract in place. They will argue on Monday that if the judge still decides to accept the reorganization plan, he should make some or all of the orchestra's $7 million endowment available to further pay creditors after the reorganization."What we want to do is investigate the endowment, to take a look at whether portions of those endowment funds could've been construed as unrestricted operating funds and thus they could've enlarged the debtor's estate for the purpose of settling our $3 million claim as well as other claims by the creditors," says fund co-chair Ray Hair.The judge could delay a decision given the new request. He could also approve or reject the reorganization plan. A rejection would give other parties the chance to submit their own reorganization plans.Meanwhile, the management and musicians remain in talks with local mediators. The management has sought to cut the number of full-time musicians and instead use a tiered system, in which groups of musicians would be signed to different-length contracts.A previous version stated that the fund sought liquidation. That information was incorrect. The fund seeks the rejection or delay of the reorganization plan. A rejection of the plan would allow creditors to attempt to change the case to Chapter 7.