Creditors Request New Trustee in Circle in the Square Bankruptcy

News   Creditors Request New Trustee in Circle in the Square Bankruptcy Attorneys for a creditors committee, which is seeking an estimated $4 million from New York's bankrupt Circle in the Square theatre, are scheduled go before the U.S. Department of Justice Tuesday, July 21, for permission to elect a new trustee to represent Circle's creditors.

Attorneys for a creditors committee, which is seeking an estimated $4 million from New York's bankrupt Circle in the Square theatre, are scheduled go before the U.S. Department of Justice Tuesday, July 21, for permission to elect a new trustee to represent Circle's creditors.

In late June, Tina L. Brozman, chief judge of the United States Bankruptcy Court, Southern District, New York, approved the appointment of Alan Nisselson, a bankruptcy attorney, as operating trustee "to oversee and guard the assets of Circle's estate."

However, according to Linda Jamieson, an associate lawyer in the bankruptcy department of Phillips, Lytle, Hitchcock, Blain & Hubert, "the creditors prefer someone with substantial familiarity with the New York theatrical industry." Phillips Lytle is the court-approved firm representing the creditors committee.

Jamieson reported creditors made a formal request of U.S. Trustee Carol Schwartz for the meeting in Schwartz's offices at 80 Broad Street at which creditors will vote.

The creditors committee members will propose theatrical general manager and producer Norman E. Rothstein, who in December, 1996, was approved by Judge Brozman as business and financial consultant to the creditors. On July 1 Rothstein told Playbill On-Line that the creditors committee is "restless and seeking any responsible, viable performing arts group to effect a sale."

CIS, a New York cultural landmark for more than 45 years, suspended operations June 17, 1997 at its current site at 1633 Broadway, between 50th and 51st Streets. Employees were discharged and the theatre went dark.

Rothstein said, "There are hundreds of debtors to be satisfied, not to mention a pending claim from 1978 of more than $1.8 million from the Internal Revenue Service."

The committee is made up of representatives of theatrical unions to which CIS owes pension and welfare payments.

Rothstein expressed concern that action taken in 1993 to make CIS's professional theatre school a separate entity "was done in contemplation of bankruptcy."

He explained that though the school continues to operate, he doesn't know the status of its future or where it will be headquartered. Circle in the Square Theatre School is currently in session with it's seven-week summer session, with approximately 70 students enrolled, according to school director E. Colin O'Leary. The school is auditioning potential students for its fall program, which begins Sept. 15.

Officially, the school is not in bankruptcy, said Jamieson, "but there are many questions which the court must address."

According to records in Jamieson's office, an entity known as Thespian Theatre, Inc. held the master lease on CIS since 1985. "Modifications have been made to this lease," Jamieson reported.

Thespian Theatre is described on the lease as being wholly owned by Theodore Mann, co founder of CIS and its long-time, former artistic director, and Paul Libin, former producing director (now producing director for Jujamcyn Theatres).

"In July, 1993, in a convoluted arrangement," said Jamieson, "Thespian Theatre, Inc. granted a license to the Circle in the Square School for use of the premises. That same day the school granted a sub-lease to Circle in the Square."

On Thursday, July 24, attorneys at Phillips, Lytle in a formal hearing before Judge Brozman will file an objection to Thespian Theatre's application of the lease and, said Jamieson, "give reasons for opposing this use of the premises."

Rothstein said that statements issued by CIS producing Gregory Mosher, former director of Chicago's Goodman Theatre and Lincoln Center Theatre, about CIS once again becoming a thriving institution have been questioned by creditors.

A July 1 statement from the creditors committee stated that "Circle in the Square Inc., the not-for-profit operating organizations which produced plays and musicals in a long and distinguished history...is regrettably bankrupt, insolvent, and defunct."

CIS was founded as a small Greenwich Village theatre-in-the-round in 1951 by Mann and Jose Quintero.

-- By Ellis Nassour

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