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Search forPlayhouse: time is up, says Hilary
Thursday, October 16, 2008, 08:10
The Playhouse board has asked for an extra six months to find the £300,000 needed to pay off major creditors and save the theatre.
The request came after it was revealed that cash from a Switzerland-based businessman may not arrive in time to meet Monday's deadline, which was set by the theatre's administrator.
Playhouse board chairman Professor Jonathan Powers said the extension was needed because the worldwide financial crisis meant it was more difficult to secure money from investors.
But in a dramatic turn, the council was approached by administrators Tenon Recovery to see if it wanted to resurrect its previous offer of £325,000 to buy the assets if the company was liquidated. The authority has confirmed this is something it is seriously considering.
Mrs Jones said the Playhouse board had been given enough time to find money to keep the company going. She said: "We consider the Derby Playhouse as a vital hub for cultural activity in Derby, including produced theatre.
"The board of Derby Playhouse Ltd is asking for more time to find a new financial backer beyond the 80 days already allowed by the administrator. I believe enough is enough.
"The council is considering making a fresh offer for the company's assets if the liquidation goes ahead after the October 20 deadline."
If the company was liquidated, the theatre's lease automatically reverts back to the council and the building could then be used to stage productions under the authority's Derby LIVE banner.
But Mr Powers warned that if the company was liquidated, creditors would receive very little money.
He believes that if the deadline is extended it could mean creditors would get more, even if the plan ultimately fails.
That is because he wants to mortgage the lease as security. It would mean that if by an extended deadline of April 20 next year the £300,000 had not been raised, the lease would be sold on the open market to the highest bidder.
Mr Powers said that could raise about £1m.
However that value has been questioned by Mrs Jones.
She said: "I am amazed by the suggestion that the lease on the building is worth £1m. I don't accept this. Is this figure likely to be correct given the current financial climate?"
Mrs Jones added: "The council will do everything it can to protect this theatre and to see it operating successfully with artistic excellence and financial stability."
Mr Powers said: "Whether the time has run out or not is entirely a matter for the creditors.
"Derby City Council has only a very small debt due to it, it is a very small creditor, so it does not have much of a voice
He added: "I would like to be able to work constructively with the city council."
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