In Legal Maneuver, City Opera Chooses Lower Bid for Company's Assets

News   In Legal Maneuver, City Opera Chooses Lower Bid for Company's Assets
The sale of City Opera's assets and name continues to go unresolved.

City Opera filed for Chapter 11 bankruptcy in October 2013. After a court auction was held Jan. 20, a board member of City Opera said the organization preferred the bid made by NYCO Renaissance, even though Opera New York offered $250,000 more, according to the New York Times.

The board member shared this news in a conference call that was held with attorneys for the parties bidding for the organization. Judge Sean H. Lane of Federal Bankruptcy Court in Manhattan, who will approve the sale of the company's assets, was also on the call.

NYCO Renaissance bid $1.25 million in cash for City Opera's name and assets, including its thrift shop on East 23rd Street. Opera New York, led by Gene Kaufman, made a bid of $1.5 million.

The Times reports that Nicole Stefanelli, a lawyer for City Opera, said on the call, "In the debtor's view the economic difference between the two bids is simply not enough to overcome the material difference in the substance of the two proposals. In the debtor's business judgment the NYCO Renaissance proposal is more thorough, and represents a far better proposal for continuing the debtor's mission."

Arthur Steinberg, a lawyer for Kaufman, asked for time before a hearing to prepare documents and depose witnesses. “If we're not going to have the hearing today, then I do think that I should be able to try this not by ambush, because that is what I feel like has happened here," Steinberg said. The hearing, which had been scheduled for Jan. 22, has been postponed due to a witness having surgery.

As previously reported, City Opera voted to recommend the sale of the New York City Opera name, related intellectual property and the New York City Opera Thrift Shop to NYCO Renaissance, Ltd. — a new and independent 501(c) 3 tax-exempt organization. NYCO Renaissance would make Michael Capasso the general director.

Capasso is the general director of the Dicapo Opera Theater, which the Times reports was sued by the musician's union Local 802 of the American Federation of Musicians for money that its members are owed. They recovered more than $50,000 in wages, pension and late fees for musicians who had not been paid for performances. Additionally, numerous singers told the Times that they were not paid for their last week of work in Dicapo’s 2012 production of Frank Loesser’s The Most Happy Fella; they were not protected by a union and have still not been paid.

The Times reports that Kaufman said in court papers that the company's assets should be sold in a court-supervised auction because the board had mishandled its affairs, resulting in allowing its endowment being severely depleted.

City Opera officials said in court papers that Kaufman's proposals exaggerated his relationships with both Opera America and the Glimmerglass Festival, according to the Times, which quoted a letter from Marc A. Scorca, Opera America's president, saying that Mr. Kaufman's proposal had represented his group "in a manner that is not consistent with our understanding of our relationship." Opera America is a service group that provided Kaufman with data that he used in developing his proposal.

The NYCO Renaissance plan includes staging City Opera productions at the Rose Theater at Jazz at Lincoln Center. Its backers include Roy G. Niederhoffer, an investment manager and former City Opera board member, and Jeffrey Laikind, another former City Opera board member. Niederhoffer agreed to become the chairman of City Opera's board, and Laikind agreed to become its president.

Today’s Most Popular News: