San Antonio Symphony Orchestra Owes Musicians’ Pension Fund $10 Million

The Symphony Society of San Antonio, the nonprofit board that ran the now-defunct San Antonio Symphony, owes more than $10 million to its musicians’ pension fund.

It is by far the largest liability listed in a statement of financial affairs filed Thursday night in bankruptcy court. According to the filing, the symphony has about $721,000 in assets, mostly from an employee retention tax credit, and about $10.9 million in liabilities.

The board announced on June 16 that it had initiated Chapter 7 bankruptcy proceedings. The 83-year-old orchestra was permanently closed following a strike that scuttled its 2021-22 season . The end followed decades of financial turmoil.

According to the filing, the symphony owes just over $10 million to the pension fund of the musicians’ union, the American Federation of Musicians. The claim is marked on the docket as both contingent and contested, meaning it will be up to a bankruptcy court to determine what happens to it, said Danielle Rushing, one of the bankruptcy attorneys. representing the Symphony Society.

“The court should decide whether the debtor was responsible for the liability and, if so, how much the debtor would be liable for,” Rushing said. “And so we listed it as contingent and disputed because the symphony disputes the amount and nature of any potential liability.”

Zachary N. Leeds, the pension fund’s attorney, said he could not say whether it was unusual for a pension obligation to be challenged in a bankruptcy case. He said when employers stop contributing to a multi-employer pension plan, they usually have to pay a withdrawal obligation.

He said the San Antonio Symphony musicians’ pensions would not be directly affected by the bankruptcy, although it will impact the fund as a whole.

“When an employer withdraws without paying monies owed to the plan, including withdrawal liability, it can be detrimental to the entire pension fund, especially a pension fund like the American Federation of Musicians and Employers , which is facing financial difficulties,” he said. . “For this reason, the pension fund will take all appropriate steps to seek payment of the debt.”

The pension obligation had been cited as the reason a plan by Symphonic Music for San Antonio to take over management of the symphony collapsed in 2017. The group – formed by major symphonic donors Tobin Endowment , HEB and the Kronkosky Charitable Foundation – was about to take the reins when he announced that he had discovered that the symphony orchestra’s pension was underfunded by millions of dollars. The group then backtracked.

After the pension, the second largest claim on file is a loan repayment of about $150,000 to the US Small Business Administration. This loan was secured by collateral which, according to the record, no longer has any value.

The filing says the symphony received loans totaling approximately $1.9 million in 2020 and 2021 under the SBA’s Paycheck Protection Program established by the Coronavirus Aid, Relief and Economic Security Act, which has was passed by Congress in 2020 to provide economic relief during the pandemic. These loans have been cancelled.

About $478,000 from an employee retention tax credit beginning in 2021 represents the majority of the symphony’s assets. According to the IRS, the refundable tax credit, also established by the CARES Act, was intended to “encourage businesses to keep their employees on their payroll.”

The symphony has approximately $60,000 in two Frost Bank checking accounts. It has no accounts receivable, which means no one owes the symphony orchestra any money.

The record also indicates that the symphony has instruments and instrument cases worth approximately $165,000. Among those assets are a Salvi Minerva harp worth $25,000 and a Heckel contrabassoon worth $18,000. It also has a music library. No value is given for this.

The filing says the symphony’s gross revenue has grown from about $5.5 million in the fiscal year ending August 31, 2020 to about $2.9 million this year.

The pension fund is one of 797 listed unsecured creditors, most of whom are individuals. Secured creditors have received or are likely to receive guarantees in the event of loan default. Unsecured creditors, such as subscription holders, will not.

Beyond the pension fund, the largest amounts owed to unsecured creditors include $37.36.34 to ASCAP, which grants performing rights for musical material; and $25,000 to William Morris Entertainment, which represents musicians and other artists.

Among those at the other end of the scale is writer Carmen Tafolla, who is owed $200. She said it was for a series of school performances called “A Midsummer Night’s Sueño”, a bilingual version of Shakespeare’s romantic comedy. Tafolla said she narrated performances and helped regionalize Spanish terms in the play.

She is not particularly concerned about the debt.

“I think we have bigger problems to fry and bigger problems to solve, including finding a better way to support the arts,” she said.

Writer Patrick Danner contributed to this report.

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Dolores W. Simon