Prince Music Theater files for bankruptcy to stall sale

Just hours before a sheriff's sale was set to begin Tuesday, owners of the Prince Music Theater on Chestnut Street filed for bankruptcy protection, staying the sale and preventing Toronto-headquartered TD Bank from seizing the Center City performance venue.

Marjorie Samoff, the theater's producing director, said the move will allow the Prince time to restructure its debts with court protection and supervision.

The filing was under Chapter 11 of the Bankruptcy Code, which essentially freezes debt collections and legal action and provides time for debtors to work out future operating plans.

"The whole notion of Chapter 11 is to give some breathing room and protection," said Samoff, founder of the American Music Theater Festival. AMTF and the Joint Theater Center are co-owners of the Prince.

The theater's principal debt - about $4.8 million - is owed to TD Bank, which had foreclosed on the property, securing a judgment on Christmas Eve 2008 and pushing it to sheriff's sale.

Rebecca S. Acevedo, a spokeswoman for the bank, issued a statement by e-mail following the bankruptcy filing in Philadelphia:

"TD Bank has been a long time supporter of the mission of the Prince Music Theater. We will continue to work through the legal process, now the bankruptcy court, on a resolution of this matter. Given the pending litigation, it would be inappropriate to comment further."

Samoff said that the bankruptcy filing will not affect the Prince's schedule of shows and films. Philadelphia Film Festival events will begin as scheduled in a little over a week, she said. Educational programming is starting up, the theater's cabaret is set and plans are moving forward for main stage events next spring.

The Prince has a 446-seat main stage auditorium and 150 upstairs seats.

The bankruptcy filing is only the latest in a complex series of events that has left the Prince and TD Bank very much at odds. The bank moved to foreclose nearly two years ago, citing nonpayment of debt.

But the theater owners said they had renegotiated the payments with TD's predecessor, Commerce Bank, and that TD reneged on the agreement after acquiring Commerce. In a 63-page lawsuit filed earlier this year, the Prince owners cited a number of debt agreements with the bank or its agents that, the suit alleges, TD Bank refused to honor.

The bank has declined to comment on the law suit.

Samoff said the Prince has a payment plan and wants to honor debts to all its creditors.

"We intend to pay," she said. "We are committed to fulfilling our responsibilities to all of our partners."