Chronology of Events Leading to Bankruptcy
The following is a chronology of events relating the Honolulu Symphony’s bankruptcy. These facts were submitted to the U.S. Bankruptcy Court and we are posting this chronology on our website so that the public can be made aware of what has transpired to date.
May 10, 2009:
The Honolulu Symphony (“HSO”) ends its 2008-09 season on a high note with several months of performances to full houses, advance ticket sales for the 2009-10 season tracking ahead of past years, an increase in the number of donors, and the successful completion of an innovative year-long music education program at Nanakuli Elementary. However, musicians are still owed 15 weeks of back pay – about 44% of their annual salary. This is the second season in a row that musicians’ pay has fallen behind (the 2007-08 season ended with musicians owed for 11 weeks), and several musicians decide they cannot return the following season.
August 29, 2009:
As a condition of collecting the musicians’ back pay, the Union is forced to agree to re-open the HSO’s 2008-11 collective bargaining agreement and accept a large pay cut to create a more “realistic,” balanced budget for the upcoming season. The re-opener reduces the 2009-10 season by five weeks, representing a 15% salary reduction for the 64 full-time orchestra members (while keeping the same number of scheduled Masterworks and Pops performances).
The new pay rate would be under $30,900 for the year, one of the lowest in the nation. The musicians also agree to drop all grievances, including claims on interest for late payments in the 2007-08 and 2008-09 seasons, which amounted to tens of thousands of dollars. The resulting budget for 2009-10 is over $1 million smaller than the previous season’s.
The musicians are told they also must agree to the selection of Majken Mechling as the new executive director despite her complete lack of experience in the performing arts. The musicians agree to a one-year term for the new executive director that includes having a recognized professional in orchestra management to assist her. Despite the HSO’s agreement to these conditions, they have not been met.
September 3, 2009:
In a press conference to unveil the budget cuts and the $1.8 million advancement from the Foundation to cover back pay, the HSO announces “aggressive” changes and a “new platform for the future of the Honolulu Symphony.” The HSO declares: “The Symphony’s new business model will accomplish several essential goals. Operating costs have been drastically reduced in all key expense areas, including administration...
In addition, strategies to secure corporate funding and large individual gifts are being aggressively implemented and additional revenue streams have been established, placing the organization on solid footing...The detailed annual operating budget with clear financial goals and justified week-by-week revenue and expense assumptions has been completed.” HS Foundation Board Chair Mark Wong notes that “weeks of collaboration and planning between the Society, the Foundation, the musicians and staff have resulted in real and meaningful change that our community has been looking for.”
September 4, 2009:
The Honolulu Symphony Musicians receive the final 11 weeks of back pay from the 2008-09 season. However, by that point, 16 musicians had either resigned or taken a leave of absence (2 more followed in the next few weeks). In addition, 19 weeks of union dues from the 2008-09 season, which had been withheld by the Honolulu Symphony, had not been forwarded to the union. Several HSO staff members - including the entire Education and Community Outreach department, which was responsible for Symphony programs which reached nearly 20,000 students in the 2008-09 season - had also resigned due to lack of pay.
September 16, 2009:
In a phone call, incoming HSO E.D. Mechling tells the Union that she “feels confident” there will be funding to cover expenses at least through the end of December, and that she’s already lined up three corporate sponsors.
September 19, 2009:
The Honolulu Symphony opens its 110th season in an exciting concert featuring world-renowned musicians Bela Fleck (banjo), Edgar Meyer (bass) and Zakir Hussain (tabla). The concerts begin and end with standing ovations. The orchestra includes eight new musicians who have been offered contracts for the 2009-10 season and have come to Honolulu to fill some of the openings created by musicians who’ve left.
September 23, 2009:
At an HSO board meeting, committee chairs are assigned; however, no board member is willing to chair development (fundraising) committee.
September 24, 2009:
The Union offers its help in setting up meetings for Mechling with key political figures, including Rep. Abercrombie’s and Rep. Hirono’s staff. The Union also continues to help facilitate efforts to access over $400,000 in federal TANF funds to reach underserved communities throughout the State - funding that the HSO has received in the past but ends up not receiving due to lack of timely action. The Union also actively engages in HSO fundraising and education and outreach planning efforts.
October 1, 2009:
In a meeting with Union leadership, Mechling says she “feels confident” that they’ve identified enough revenue to get through at least the end of November, and that supporters who’d been waiting to give were now coming forward. The next meeting with the Union, scheduled for October 14 and then re-scheduled for October 15, is canceled at the last minute by Mechling.
October 20, 2009:
The HSO chair informs the board and the Union president of plans to postpone the first concert set in November due to financial considerations. The HSO management does not inform the musicians of this decision.
October 21, 2009:
The HSO chair announces plans for a new fundraising campaign to raise $1 million by the end of 2009. A kick-off event is planned for October 28. On October 27, the event is “postponed;” no reason is given.
October 23, 2009:
Without warning, the HSO management unilaterally reduces the pay of part-time musicians by 15% (retroactive to beginning of season), leading the Union to file an unfair labor practice charge with NLRB.
October 30, 2009:
A special HSO board meeting is held with only a few days notice and without an agenda disclosed in advance. Mechling reports that the HSO has less than $20,000 left in the bank, has nearly $1 million in vendor debt, and will be unable to produce any concerts in November. She also claims that no donors are willing to come forward unless major changes are made in the HSO's "business model." No written financial report is distributed. After an 80-minute meeting and a presentation by a bankruptcy attorney recommending bankruptcy, and ignoring counter arguments from the musicians in attendance and board members counseling taking more time, the board votes overwhelmingly to file Chapter 11 bankruptcy (14-4 out of a board of 28).
November 5, 2009:
After not responding to repeated requests from the Union to talk about the situation, the HSO leadership finally meets with Union representatives. The HSO representatives re-confirm the decision to file bankruptcy, but say that it will go easier for the musicians (and will be more likely that part of the season can be salvaged) if the Union agrees immediately to a plan to reduce the orchestra size by 50%. They give the Union barely 24 hours to respond, and say they will file chapter 11 on November 9.
The Union, concerned about rumors that insurance premiums haven’t been kept current, asks for news from HSO management. Management reports that they have been in discussions with the HSO’s health insurance providers about setting up a payment plan to keep coverage going.
November 6, 2009:
After producing four concert sets (three Masterworks and one Pops) of its 110th season, the Honolulu Symphony publicly announces plans to cancel the remaining concerts in 2009 and file for Chapter 11 bankruptcy. Once again, HSO management does not notify the musicians.
On the same day, HSO musicians covered by one of the HSO’s two health insurance plans, HMSA, are notified by HMSA that their coverage has been terminated effective November 1. The notice is dated November 5.
November 12, 2009:
The HSO board meets. Musician board members make an impassioned plea for the board to re-consider their decision to file for bankruptcy and make it clear they’re willing to enter into discussions on other options - an offer which is ignored. The HSO’s attorney suggests that it would be most useful to have information about how other orchestras have dealt with financial crises. Instead, the board passes a resolution calling on the musicians - their employees - to present a plan, in writing, within the next four days. The musicians are then forced to leave the meeting while the other board members talk with their bankruptcy counsel.
November 25, 2009:
After weeks of painstaking research, the Union presents the HSO with its findings about how nine American orchestras have dealt with bankruptcy. The report summarizes:
The experience of orchestras in bankruptcy, especially in the absence of adequate resources and a clearly researched plan prepared by experienced professionals, suggests that it is very likely that once the HSO files Chapter 11 it would end up in Chapter 7 dissolution. Given the HSO’s isolation and the limited number of other performing opportunities for classical musicians in Hawai’i, once that happens it is even less likely that a professional full-time orchestra will exist here again anytime soon.
November 29, 2009:
Renowned pianist Christopher O’Riley, whose performances with the HSO had been canceled, volunteers his time to present a benefit recital for the Symphony Musicians. Musicians partner with Hawai’i Public Radio, UH-Manoa Music Department, and Chamber Music Hawai’i to present the performance. Concert is a great success and raises over $16,000 for Musicians.
December 3, 2009:
HSO musicians seeking medical care at Kaiser Permanente (the HSO’s remaining health insurance plan) learn that they are no longer covered, retroactive to November 1. The HSO management does not inform or warn the musicians of this.
December 18, 2009:
The HSO files for Chapter 11 bankruptcy protection. In pleadings we learn for the first time that the Debtor has cancelled all concerts through 2010.
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