"Things have to change, and they are going to change - the kind of change to put the Philadelphia Orchestra, the Academy of Music and [Encore Series Inc., the Pops' legal name] on a sound financial platform," he said.
Musicians of the orchestra strongly opposed the Association's Saturday filing in U.S. Bankruptcy Court, Eastern District of Pennsylvania, and their attorney Wednesday called the action "unnecessary" and "a mistake."
The "Orchestra of Firsts" is "now the first major cultural institution in this county to file chapter 11," lawyer Bruce Simon told Judge Eric L. Frank and a courtroom of about 60 participants and observers, including lawyers, orchestra staff and board, and a few musicians.
Lawyers for management and musicians had agreed a few minutes before the start of Wednesday's hearing that the afternoon's proceedings would not include a motion by management to impose a new contract on musicians.
Negotiations for a new deal with players continue - as do all concerts.
Much of the hearing was devoted to procedural matters, but both sides quickly outlined one of the central issues in the case: whether the orchestra, which is seeking to wipe the slate clean on tens of millions of dollars that it may be obligated to pay for the musicians' pension plans, could be compelled to use some of its $140 million in endowment to satisfy that obligation.
The nest-egg ($120 million belonging to the orchestra, $20 million owned by the Academy of Music) is money meant to be kept in perpetuity, the income from which is spent for various projects or general operating costs.
The orchestra says it has spent nearly all its unrestricted endowment - that is, funding that had no restrictions placed on it by donors. Only donor-restricted endowment remains, and the association's position is that it cannot be spent.
