A decisive court hearing in the Louisville Orchestra’s bankruptcy case is today. A judge is expected to rule on the management’s financial reorganization plan, which outlines how it will pay its creditors and continue operations. But attorneys for a musician’s pension fund say the proposal is invalid until the musicians and management agree on a contract for the next season.
Officials with the fund say if the plan goes forward without a contract, the orchestra owes them a $3 million penalty fee. In that case, they say the orchestra’s $7 million endowment should be considered part of its assets and potentially be used to pay the pensions.
“What we want to do is investigate the endowment, to take a look at whether portions of those endowment funds could’ve been construed as unrestricted operating funds and thus they could’ve enlarged the debtor’s estate for the purpose of settling our $3 million claim as well as other claims by the creditors,” says fund co-chair Ray Hair.
The argument doesn’t mean the fund wants the judge to reject the plan. Hair adds that the best outcome would be a delayed ruling that gives the parties more time to finish contract negotiations.
“We are hopeful that eventually peace will break out and grow and flower and music will return to Louisville and our $3 million liability claim will go away and everything can be better,” he says.
If the judge rejects the plan, other creditors, including the fund, could submit their own plans for consideration.