Judge Prepared To Dismiss Creditors' Case Against Circle In The Square

News   Judge Prepared To Dismiss Creditors' Case Against Circle In The Square
 
Circle In The Square founder Theodore Mann and former producing director Paul Libin have retained their grip on the theatre they once ran, at least for now. Tina L. Brozman, chief judge of the U.S. Bankruptcy Court in Manhattan, is set to dismiss a case brought against the two men by a group of the theatre's creditors.

Circle In The Square founder Theodore Mann and former producing director Paul Libin have retained their grip on the theatre they once ran, at least for now. Tina L. Brozman, chief judge of the U.S. Bankruptcy Court in Manhattan, is set to dismiss a case brought against the two men by a group of the theatre's creditors.

The decision leaves the two men in possession of the only tangible assets left from the legendary nonprofit theatre: the 1633 Broadway space itself and the company's name. The creditors committee began soliciting proposals last fall from potential purchasers of the theatre, in hopes of recouping some of the $4 million in debt left when Circle closed in 1997. Standing in their way, however, were Mann and Libin, who still held the lease through their company, Thespian Theater Inc. Brozman is expected to sign an order of dismissal by the end of this week, according to the judge's office. The decision comes after six months of legal wrangling. "We don't believe there was any merit to any of the claims that were made," said attorney Arthur Olick, who represents Mann and Libin. Frank Manfredy, attorney for the creditors committee, commented only that the case had not yet been officially dismissed. That fact, however, seems only a technicality, and Judge Brozman's office confirmed that she would sign the order.

Much of the dispute surrounding the lease centered around a byzantine 1993 transaction in which Thespian granted a license to the school for use of the premises. That same day the school granted a sub-lease to the theatre company. Former trustee for the creditors, Norman Rothstein, has suggested that this move was made "in contemplation of bankruptcy."

Other parties close to the case viewed the resolution with dismay. "I always said, if something feels like it isn't right, it probably isn't," said Enid Langbert, lawyer for former Circle Artistic Director Josephine Abady. "It was a sad decline. First there was a theatre in bankruptcy that was at least in operation. That didn't seem so terrible. Then there was no entity, but there was the idea that the assets and the liability go together, that if there was a sale, the money would go to the creditors. This seems like the worst possible result." Abady has brought a separate suit against two Circle board members for breach of contract and wrongful termination.

For now, the space will remain occupied by the Circle In The Square School, the only vestige left of the company. Olick said that the creditors committee could not bring another suit against Thespian. He allowed, however, that individual creditors could possibly sue either of the men directly. Mann and Libin did not return phone calls by press time. -- By Robert Simonson

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