Union, orchestra still at odds on endowment information release

The musicians' union continued on Thursday to demand - and Philadelphia Orchestra management continued to resist - the release of information relating to the orchestra's endowments.

Specifically, lawyers for the pension fund of the American Federation of Musicians argued in U.S. Bankruptcy Court that their side was entitled to a large-scale probe of the orchestra's finances and operations to help determine whether the endowments might end up being used to satisfy the pension fund's potential claim as the largest creditor in the orchestra's Chapter 11 case.

Judge Eric L. Frank said he would consider the question and issue a ruling as soon as Friday.

Whether the pension fund is owed millions by the orchestra depends on whether the Philadelphia Orchestra Association in fact withdraws from the fund. Though the association has not formally ended its participation in the pension program, it has said it intends to do so.

Such a withdrawal would trigger a $35 million tab due to the fund, AFM lawyers said Thursday, using what they said were newly calculated figures. Previous estimates were between $23 million and $25 million.

The association wants to move musicians from the AFM defined-benefit pension plan to a defined-contribution plan.

Lawyers for the association and the pension fund of the American Federation of Musicians have tussled for weeks over the question of the probe - in bankruptcy parlance, a 2004 examination - and how deep it might go.

The association does not dispute the union's right to basic financial data, such as audits. But the AFM is seeking a level of detail that the association argues would be burdensome, from both financial and "manpower" perspectives - faxes, e-mails, texts, and instant messages to and from senior management on matters relating to the musicians' contract, pension, endowment, or "projections for the future viability of the orchestra."

The association asserts that the remaining portions of its endowments are restricted by donor agreement to remain untouched in perpetuity. The union is pressing the association for documentation to support that claim, with the goal of compelling the association to use a portion of its endowments ($120 million in orchestra accounts, $20 million for the Academy of Music) to satisfy any liability of withdrawing from the AFM multiemployer pension fund.

Frank indicated that a good first step would be for the association's lawyers to produce a log of documents and information it had provided to others - such as the Pension Benefit Guarantee Corp., the federal agency that steps in when entities are unable to meet pension obligations - so the AFM fund might match that list against the information it seeks.

And he suggested that if he ruled that the union were entitled to search the association's hard drives for e-mails - a potentially expensive proposition that would have to be conducted with the help of an outside firm - the cost of doing so might be shared by both sides.