The situation in Nashville is beginning to seem worrisome:
Foreclosure proceedings have been initiated against the Nashville Symphony Orchestra, and an auction of its landmark Schermerhorn Symphony Center has been scheduled for June 28.
Formal notice of the foreclosure was issued by Bank of America, the lead lender on the $82.3 million still owed on the concert hall.
“The bank group has been in discussions for some time with the orchestra to help it resolve its debt on an acceptable basis and operate at a sustainable level,” said Shirley Norton, a spokeswoman with Bank of America. “However, (the Nashville Symphony Association) is in default and has been unwilling or unable to repay the debt. Left with no other alternative the bank group has been forced to file for foreclosure, always a last resort . At the same time, we continue to be in discussions with the Symphony.”
The notice states that the concert hall will be sold “to the highest bidder for cash, at public outcry.”
The Symphony could forestall a sale by filing for bankruptcy protection.
I love the line about how the hall will be sold “at public outcry.” I think some public outcry is almost inevitable, although not in the form the notice meant.
This could, of course, just be a very large and public game of chicken:
“Negotiations with the bank group are continuing, and the Symphony and its Financial Advisory Committee remain squarely focused on achieving a resolution that positions the Symphony for long-term stability,” the Symphony said in a statement Thursday afternoon. “Our preferred course of action remains to reach an agreement out of court. That said, the Symphony Board understands and accepts its responsibility to act as necessary to protect the assets of the Symphony. We are preparing appropriate measures to help ensure that the Symphony continues to operate normally and pursue its important cultural and educational mission.”
Mayor Karl Dean sent a letter to Edward Goodrich, chairman of the Nashville Symphony Board, on Thursday “urging that the Symphony and its banks do everything possible to achieve a settlement without the need for litigation or a bankruptcy filing.”
But this article suggests that the Nashville Symphony may already have lost some control over the direction of their vehicle, even if they haven’t yet thrown the steering wheel out the window:
The Nashville Symphony Orchestra suffered an $11.7 million loss in the fiscal year ending July 31, 2012, as its revenue plunged by more than 50 percent to $21.5 million.
The grim figures were included in the orchestra’s Form 990 tax filing, which was made public Tuesday. A year earlier a $12.7 million surplus was recorded.
Part of the revenue decline was attributable to $18.9 million in income from flood damage proceeds that the symphony recorded in fiscal 2011.
According to the return, contributions dropped from $14.7 million to just under $10.6 million. Investment income dropped from $6.4 million to $2.2 million…
Late last week, lawyers for Bank of America named a new trustee over the remaining $82.3 million in debt. The new trustee, Nashville attorney Charles Sanger, referred questions to a Bank of America spokeswoman. Bank of America spokeswoman Shirley Norton declined to comment on the change of trustees…
“An educated guess would be that it is the first step in initiating foreclosure proceedings,” said Steven Lefkowitz, a Nashville attorney who handles bankruptcies. “I would say that replacing the trustee was the first step.”
A bankruptcy filing by the Symphony could forestall foreclosure proceedings.
There are several possible explanations for the various declines quoted in the article, not all of them apocalyptic. But there are none I can imagine that actually represent good news.
To end on a more cheerful (if completely unrelated) thought, here’s the best sentence I’ve read in a long time. It comes from the best-written orchestral blog in the universe, Matt Hovnanian’s Bass Blog:
Loren Maazel has long impressed me as the Hannibal Lecter of conductors – a veneer of erudition and utmost gentility overlies something I want to know nothing about – the uncanny precision of his gestures brings to mind something clinical, the steel gears and levers of an overdeveloped intellect conjure up something vaguely Mephistophelean.
I’d love to write a line that good before I die.