Bridging The Gap Between Employees And Management In BankruptcyOne of the most difficult aspects of Chapter 11 bankruptcy is renegotiating employee and retirement agreements which may be draining an already financially struggling company. Employee compensation and retirement agreements are an emotional issue in Chapter 11 bankruptcy cases, especially in the arts. The recent bankruptcy filing of the Philadelphia Orchestra demonstrates just how emotional bankruptcy can be when artist compensation is reduced due to the financial needs of the company. Just like other businesses, artists facing bankruptcy of their company often feel that they are being victimized by the company as expressed in a recent op-ed piece on the bankruptcy case.

We believe the management chose bankruptcy to escape provisions of our contract that it doesn’t like, and that it did so heedless of the cost to the orchestra’s reputation. The board and management are seeking to renege on their obligations, including pension obligations. This could reduce the pensions of musicians who have already retired – an unfair and unacceptable outcome. And their push to reduce the size of the orchestra and the compensation musicians receive will undoubtedly hurt our ability to attract and retain the world’s finest musicians.

While there are certainly some companies who want to change agreements they don’t like, when most companies change employee agreements in bankruptcy it is because their very survival depends on it. It’s unfortunate that this orchestra’s bankruptcy case is already becoming adversarial. While we’re not sure exactly how the orchestra communicated the bankruptcy process to the musicians, it is important that they help the musicians understand how these cuts will create an orchestra that can survive for another 100 years. It’s also important that they share a clear vision for the orchestra after bankruptcy so that the musicians can see how they will personally benefit from the changes.

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