By Steve Tawa
PHILADELPHIA (CBS) — The Philadelphia Orchestra and the major thorn in management’s side during the more than year-long bankruptcy process, the National Musicians’ Pension Fund, have settled their dispute.
The settlement paves the way for a smoother and quicker exit from bankruptcy.
The Philadelphia Orchestra Association and the American Federation of Musicians were expected to do battle next week in the courtroom over how to compensate the pension fund.
The Association’s chief bankruptcy lawyer, Lawrence McMichael, says they’ve worked out an agreement with their main adversaries.
“The settlement calls for a one-time payment to the fund by the orchestra of $1.75 million,” McMichael explained.
McMichael says that’s far below the AFM’s claim to which it was entitled, as a result of the association withdrawing from the fund, six-months after filing for Chapter 11 protection.
“The claim made by the pension fund was over $35-million. We had a trial scheduled to start next Monday on the first $3-million of that claim,” McMichael said.
The settlement also means the pension fund will not try to oppose the Orchestra’s soon-to-be-filed reorganization plan to exit bankruptcy in mid-summer.