NASHVILLE, Tenn. — The Nashville Symphony reached a deal with creditors Monday to avoid bankruptcy and prevent the sale of its Schermerhorn Symphony Center.
Nashville Symphony Association board treasurer Kevin Crumbo said the organization reached a settlement to eliminate a commercial bank debt of more than $80 million for a lump-sum payment of an undisclosed amount.
“The only long-term debt now is a $20 million note payable to a local philanthropist,” Crumbo said.
Martha R. Ingram, a longtime donor and board member, was identified her as the philanthropist, but her spokesman did not know the details of the financial arrangements.
The debt was related to a $102 million bond issue in 2004 that helped finance the organization’s downtown symphony hall. Symphony officials in March announced that they would not renew a letter of credit with Bank of America, which secured the bond.
A letter to patrons blamed the economic downturn and the massive flood of 2010 for the organization’s financial troubles. The letter said the symphony suffered more than $36 million in losses.
After months of negotiations, the bank began foreclosure proceedings on the symphony center with an auction scheduled for Friday. On Monday, the bank released the Symphony Association from its previous obligations.
A statement from Ingram reads, “The settlement is a great encouragement to all of us who have worked so hard over the years to build the orchestra and its spectacular new home downtown. It is clear now that the symphony organization has work to do to improve its operating results and develop increased annual support from its donors.”
The Symphony Association announced last week that it was laying off all food service staff, saying it was not directly related to the symphony’s core mission. Food service will be provided by outside vendors.
Crumbo said there is still much to be done as the association continues to restructure in order to become more financially stable. He declined to give specifics about the restructuring process, specifically mentioning that the association has begun negotiations with the musicians union over a new contract, and both sides have agreed not to discuss details of those talks with the media.
The current six-year contract expires July 31. In a news release last week, the union made clear its position that the financial problems of the Symphony Association were not due to the musicians making too much money.
“The Nashville Symphony musicians’ total compensation is less than 30 percent of the NSO annual budget,” according to a release from the Nashville Musicians Association.
Symphony consultant Drew McManus said that a number of orchestras around the country have faced financial problems in recent years, but Nashville is unique in trying to win concessions from the banks first before attempting to negotiate with the musicians.