Judge: Dilworth OKd in orchestra bankruptcy

Posted: May 26, 2011

The judge in the Philadelphia Orchestra Association's bankruptcy petition approved on Wednesday the retention of law firms and other professionals in the case.

Judge Eric L. Frank granted the orchestra and Academy of Music's use of New York bankruptcy consultant Alvarez & Marsal. The approval is retroactive to 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.

He affirmed retention of the law firm Curley, Hessinger & Johnsrud to handle related orchestra negotiations of a new contract with musicians.

The court also heard once again an exposition on the question of whether Dilworth Paxson had an "actual, or at least potential," conflict of interest in representing the orchestra in its bankruptcy; the firm's chairman, Joseph H. Jacovini, is a member of the orchestra board.

Frank said previously he was inclined to allow use of the firm, pending objections. An earlier objection by Paul Rosen, attorney for Peter Nero, evaporated Wednesday, but not until he had recounted the history of contractual agreements and disagreements between the orchestra and Nero and his Philly Pops.

Rosen indicated he would drop his objection because 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 said. If the groups resume a more bellicose stance, he said, he would be satisfied with the appointment of another law firm to represent the association in that one issue.

Dilworth partner Lawrence G. "Larry" McMichael said Jacovini had been "walled off" on bankruptcy matters. He added that although Dilworth had donated $100,000 to the orchestra's recovery fund, it was "not a quid pro quo." Frank granted Dilworth's application as the association's bankruptcy attorney.

McMichael updated the court on developments since the last session - the extension with musicians, to July 15, of a contract addendum deferring a scheduled raise, and the new involvement of Federal Mediation and Conciliation Service director George H. Cohen on "getting through really thorny issues" in the contract talks.

In its initial bankruptcy petition, the orchestra association cited the need for new deals with musicians, the Pops, and its Verizon Hall landlord, the Kimmel Center.

McMichael revealed another partner Wednesday with which the orchestra has had differences: SpectiCast, which simulcasts concerts to retirement homes and other venues. Its 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," McMichael said.

"I don't think it's fair to call it a dispute," Pew, SpectiCast chairman and CEO, said in a call. Discussions to resolve differences have been going on for 18 months, 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."

Frank agreed to McMichael's request to extend the current deadline for filing schedules of assets and liabilities and other financial information, saying he would grant an extension to June 15.


Contact music critic Peter Dobrin at pdobrin@phillynews.com

or 215-854-5611.

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