Honolulu Symphony to file for bankruptcy protection

The Honolulu Symphony, citing $1 million in debt and a lack of funds to keep operations going, said on Nov. 6 it will file for Chapter 11 bankruptcy protection. The Honolulu Symphony Society Board had voted to file for bankruptcy at a meeting on Oct. 30, but waited to announce the decision after management met with the musicians’ union.

“As unfortunate as the decision is, given the circumstances and the absence of any definite significant donations, the vote by the board reflects our responsibility as an organization to fiscally responsible management,” said Executive Director Majken Mechling, who joined the symphony in September. “We cannot spend money we do not have.”

The symphony announced cancellation of the remainder of its scheduled 2009 concerts. The revenue shortfall of the past two years meant the symphony could not pay its musicians and staff “on a consistent and timely basis,” it said. Last spring, the symphony had a $2 million shortfall that caused it to withhold paychecks for nearly three months. Musicians, conductors and staff had agreed to an across-the-board 15 percent payroll reduction for the 2009-2010 season, which began in September.

Although $2.1 million in advances from the Honolulu Symphony Foundation brought payroll up to date in August, it did not cover operating expenses and the symphony is $1 million in debt. Although the symphony’s board of directors created a balanced budget and made improvements to its operations and finances, revenue from ticket sales and contributions were not enough, and the symphony’s payroll and operating accounts were “expended by late October,” the news release said.

Payroll for the musicians’ salaries and benefits totals $4.1 million, “which has proven financially unsustainable — particularly in the face of the extraordinary ongoing national and local economic crisis,” the symphony said.

“Given its current and projected financial status, the Society cannot continue to sustain a 64-piece orchestra,” Mechling said. “We cannot continue with business as usual.” The board, which met with the musicians’ union on Friday, has proposed reorganizing the symphony as a smaller orchestra whose costs would be more in line with revenues.