The Nashville Symphony and its creditors have reached a deal today to restructure the nonprofit’s debt, avoid a June 28 foreclosure and keep the Schermerhorn Symphony Center from being auctioned.
Sources familiar with the agreement told The City Paper that the banks, led by Bank of America, will forgive and write off a significant portion of the debt used to build the Schermerhorn while the symphony will restructure its operations in exchange for new lending terms.
A public announcement is expected soon.
The two sides appeared to be getting closer on Monday when the symphony laid off its entire catering and dining staff, a move designed to cut costs and focus the nonprofit on its “core mission,” the organization said in a statement. Spending outside of music-related activities had been criticized by sources on the banking side during negotiations. The symphony was confident enough in its status with the banks to begin contract negotiations with the musicians union, whose contract expires at the end of July.
Private talks over credit terms went public three months ago.
In March, the symphony association declined to renew a letter of credit when the banks refused to renegotiate better terms for the debt. The symphony claimed that post-2010 losses related to the flood put the nonprofit on shaky financial ground and made it unable to repay the construction-related debt on the Schermerhorn. Sources close to the banks characterized the symphony's spending as “too much.”
As early as April, creditors were exploring foreclosure and, in response, the symphony hired noted bankruptcy attorney Robert Mendes to protect the nonprofit’s assets.
Bank of America, holding more than $80 million in debt related to the building of the downtown center, served notice of foreclosure two weeks ago after negotiations broke down.