Final applications for payment have been submitted by the firms handling the Philadelphia Orchestra Association's bankruptcy. Fees claimed by the seven major professionals seem to support the estimate previously given by the orchestra: just below $10 million.
The fees listed in court papers over the past few days only go back as far as the bankruptcy filing itself in the spring of 2011, and the orchestra racked up bills well before then as it researched the option of chapter 11.
The top three billers (from 4/16/11 to 7/30/2012):
- Dilworth Paxson: $3.04 million, plus $75,000 in expenses. Dilworth's chairman is a member of the orchestra board.
- Alvarez & Marsal: $1.55 million, $102,000 in expenses.
- Curley, Hessinger & Johnsrud: $777,000, plus $6,885 in expenses. Curley is the firm that handled the orchestra's labor relations, so you might view some of their fee as being incurred in a normal negotiating year, and some specific to the bankruptcy.
It's not yet clear whether the strategy taken in Philadelphia will be emulated at orchestras elsewhere, though a recent piece in Bloomberg Businessweek certainly reads like an endorsement of the idea:
Struggling symphony orchestras that should consider using federal bankruptcy courts to stabilize their finances include those with runaway expenses similar to Philadelphia’s, said Lawrence G. McMichael, a lawyer for the orchestra in its bankruptcy case.
If a symphony faces contract and pension obligations it can’t afford, owes debt it can’t pay, or needs financing it can’t get, bankruptcy might be a good option, said McMichael, of the Philadelphia law firm Dilworth Paxson LLP.
The entire piece is here.