With the downturn in the economy, many who once frequented plays or donated to nonprofit playhouses now no longer have that discretionary income. In other cases, while some do have the income, due to distrust in the economy, many choose to save instead of spend on those things deemed unnecessary.
Because of this, theatre companies in Florida are struggling. Just this past June, after 25 years in business, the Florida State theater group filed for a Chapter 7 bankruptcy and shut its doors. Now, Boca Raton-based Caldwell Theatre Company is thinking it too will have to file for bankruptcy in order to prevent a foreclosure and having a court-appointed receiver in charge of the theater's finances.
However, unlike the Florida State theater group, Caldwell plans on filing for Chapter 11 bankruptcy in order to restructure and stay open.
When looking at the issue with Legacy Bank wanting to foreclose, it seems that the theater group has been struggling to make monthly mortgage payments ever since moving into a $10 million playhouse in 2007. In order to complete the construction on that playhouse, the nonprofit had taken out a $5.6 million mortgage.
Since then, the theater has been given three mortgage modifications. However, the nonprofit continues to struggle, mostly due to a decrease in donations and ticket sales. But, with the economy starting to rebound, the theater is hopeful that donations will once again start to pick back up.
By filing for Chapter 11 bankruptcy, the plan is that the theater will be able to reorganize and restructure debts in order to once again be on sound financial ground.
Source: Sun Sentinel, "Boca's Caldwell Theatre headed for bankruptcy to try to stave off foreclosure," Peter Franceschina and Erika Pesantes, Feb. 15, 2012