The deal, outlined by lawyers Thursday during a courtroom recital and in court documents, was approved by U.S. Bankruptcy Judge Eric L. Frank.
Agreeing with lawyers that the alternative to Nero's new pact was lengthy and expensive litigation that could have jeopardized next season, Frank called it a "reasonable settlement."
The judge's nod put to rest, at least for now, a flare-up between Nero and ESI set off by the bankruptcy of the Philadelphia Orchestra Association, which was, at the time of its Chapter 11 filing, still operating the Pops. Later, ESI filed a motion with the court to reject Nero's contract after two months of negotiations failed to produce ESI's proposed 40-percent cut in his compensation.
Nero's lawyer, Paul R. Rosen, said Thursday that with the settlement in place, "all of Peter Nero's future is intact." He is not only free to accept guest conducting engagements elsewhere, he is, after the split from ESI, free to perform locally under other names, such as "Peter Nero and the Pops" or "Peter Nero and His Pops."
"He is not retiring," Rosen told the court.
Separately, ESI Wednesday filed its plan of reorganization, the first step in exiting bankruptcy, and requested an expedited hearing schedule. Calling ESI's proposed timetable "a little aggressive," Frank agreed to a compromise that would give creditors time to vote on the plan and hold a confirmation hearing just after Labor Day.
Nero's new contract calls for only a very minor reduction in his compensation on a per-concert basis, though he will lead just four of the six programs planned for 2012-13, with his last in Verizon Hall slated for May 2013. The 78-year-old Grammy-winning musician will earn $295,000 for 18 performances plus other compensation under the new contract; under the old one, for more concerts, he was paid $513,000 (an umbrella amount under which he also paid many of the expenses associated with running the pops, such as transportation and office space).
Nero's planned departure could be upended if ESI fails to make payments to him at any one of three points: July 2013, November 2013, or January 2014.
The deal calls for ESI to collateralize payment of the buyout with a pledge of all its assets in the event of default - i.e., the missing of any of three payments. Elements of the agreement are further detailed in a separate agreement that ESI requested be placed under seal, a request to which the judge assented.
Contact Peter Dobrin at 215-854-5611 or firstname.lastname@example.org. Read his blog at www.philly.com/artswatch.