The judge in the Philadelphia Orchestra Association’s bankruptcy petition Wednesday approved the retention of law firms and other professionals in the case.
Judge Eric L. Frank granted the orchestra’s and Academy of Music’s use of New York bankruptcy consultant Alvarez & Marsal. The approval is retroactive to the firm’s hiring, Jan. 18, with a $50,000 retainer and payments of $432,955.84 in the days leading up to the April 16 bankruptcy filing by the orchestra and Academy.
Frank affirmed the retention of law firm Curley, Hessinger & Johnsrud in handling the orchestra’s related negotiation of a new labor contract with musicians.
The court also heard once again an exposition on the question of whether Dilworth Paxson has an “actual, or at least potential,” conflict of interest in representing the orchestra in its bankruptcy; the firm’s chairman, Joseph H. Jacovini, is also a member of the orchestra board.
In an earlier court session, the judge said he was inclined to allow it, pending objections. A previous objection by Peter Nero attorney Paul Rosen evaporated Wednesday, but not until after he recounted the history of contractual agreements and disagreements between the orchestra and Nero, and the group he leads, the Philly Pops.
Rosen indicated he would drop his objection since progress had been made in negotiations with orchestra lawyers from Dilworth over the changing relationship between the two groups.
“The question is do we stay married, or separate?” Rosen told the judge.
If at some future date, the two groups resumed their more bellicose stance toward each other, Rosen said he would be satisfied with the appointment of a law firm other than Dilworth to represent the Orchestra Association in that one issue in a panoply of issues relating to the orchestra’s bankruptcy case.
Dilworth partner Lawrence G. “Larry” McMichael told the court that Jacovini had been “walled off” on matters involving the orchestra’s bankruptcy. He added that Dilworth had donated $100,000 to the orchestra’s recovery fund, but that the gift was “not a quid pro quo for our retention.”
The Judge granted Dilworth’s application as the Association’s bankruptcy attorney.
McMichael updated the court on developments since the last session. He spoke about the extension with musicians, to July 15, of a contract addendum deferring a scheduled raise, as well as the new involvement of Federal Mediation and Conciliation Service director George H. Cohen on “getting through really thorny issues” in ongoing contract talks with musicians.
In its initial bankruptcy petition, the Orchestra Association cited the need for a new deal with musicians, as well as a desire to renegotiate agreements with the Pops and its landlord for Verizon Hall, the Kimmel Center.
McMichael Wednesday revealed one more close partner with which the orchestra has had differences: SpectiCast. Some of the orchestra’s concerts are simulcast to retirements homes and other venues by the company, whose three principals are orchestra board members John H. McFadden, Derek N. Pew and Joseph M. Field.
“There is a dispute that has existed as to who owes what to whom under the contract,” said McMichael.
“I don’t think it’s fair to call it a dispute,” said Pew, SpectiCast’s chairman and CEO, in a call. Discussions to resolve differences have been going on for a year and half, he said, and “some got resolved and some didn’t. But when the orchestra got into its emergency phase, we were not getting attention from anybody. My presumption is everything will be resolved. I firmly believe that media is a big part of what can make this orchestra thrive again at some point.”
McMichael asked Judge Frank to extend the current deadline for filing schedules of assets and liabilities and other financial information. The judge said he would issue an order granting an extension to June 15.