Breaking News: Caldwell Cancels Last Show; “Every Option Is On The Table” For Future

By Bill Hirschman

The Caldwell Theatre Company, the region’s second oldest professional theater still in operation, has cancelled its last show of the season and is considering every possible scenario for its future, its artistic director announced early Wednesday afternoon.

“Every option is on the table,” said Artistic Director Clive Cholerton, who has been fighting for years to restore solvency to the Boca Raton theater.

Asked whether that included closing the theater in its 37th season, Cholerton would not elaborate other than to repeat, “Every option is on the table.”

There is no timetable for making a further decision, he said.

Currently, the theater is working with a receiver appointed by state court in a pending mortgage foreclosure action to control the company’s expenditures.

Closing the much-honored theater would mark the second seismic convulsion in the theater community since Florida Stage declared bankruptcy last June and liquidated its assets

Cholerton announced two weeks ago that he was postponing the final show of the season slated to open in previews April 15, the world premiere of Our Lady of Allapattah by Miami playwright Christopher Demos-Brown.

But Cholerton later decided it was fiscally “prudent” to simply not mount the production, he said Wednesday.

Patrons with tickets to the season or the individual show can redeem them at Palm Beach Dramaworks for its next show Proof (May 25 – June 17) or its summer musical show, The Fantasticks (July 13 – Aug. 5).  “It was important to make sure our parties were made whole,” Cholerton said.

“As much as we wanted to personally honor our ticket holders, it simply wasn’t feasible,” Cholerton wrote in a news release.  “We continue to explore all of our options and will make a formal announcement when all the facts have been addressed.   We are incredibly appreciative of the generosity of Bill Hayes and Sue Ellen Beryl of Palm Beach Dramaworks and trust that ticket holders will feel they have been provided adequate consideration for purchase.”

Scott Brenner, the receiver appointed by the Palm Beach County Court to protect the theater assets, said last Thursday that the decision to initially postpone the play was made by Cholerton, based on the fact that “there’s no money in the checkbook.”  He said that if the theater raised money for the play, “I would be open to that conversation.”

Brenner was appointed March 16 as a mutually agreed stopgap solution to a foreclosure petition filed by Legacy Bank which owns $5.9 million in mortgages on the Caldwell’s new home opened in 2007 at 7901 N. Federal Highway.

A receiver has complete control over expenditures in order to preserve as much of the assets as possible, especially the physical property, Brenner said, referencing the court order. But the court order allows, and Brenner encourages, continuing to produce income, such as renting the theater to outside clients. In fact, “the phone has been ringing from a number of people who may be… interested in renting the facility,” Brenner said.

The receiver structure established by the state court was agreed to by the Caldwell as a way to sidestep the previously announced plans to file for Chapter 11 protection in federal bankruptcy court, buying time to restructure the debt and continue operations, said Donald Walters, a Coral Springs attorney representing the Caldwell in the foreclosure case.

The Caldwell had been forging ahead with plans to assuage old subscribers, attract new ones and create a 2012-2013 season, said Producing Director Patricia Burdett on March 22. Cholerton said in February that he hoped the theater would be able to attract donors and subscribers by creating a feasible structure for paying off its debt. He was encouraged and frustrated that the company had nearly broken even on its $1.6 million operating budget last fiscal year, but had not been able to earn enough to reduce the debt.

The exact size of the Caldwell’s current debt has never been confirmed publicly although Cholerton did say in February that it exceeded $1 million, not counting its mortgage. It reported $1.18 million in liabilities on its 2009 federal tax form. He said Wednesday that he wasn’t sure what the figure was off the top of his head and did not want to have to back away from a published report later.

The situation frustrated the Caldwell’s leadership because single ticket sales had doubled during the year and the level of subscribers, while far below the Caldwell’s glory days, had stayed nearly even.

That mortgage has been its major headache. Officials with Legacy Bank, have been frustrated that the Caldwell has not paid anything in seven months, Legacy’s attorney Michael Moskowitz said a few weeks ago. The bank restructured the loan July 22 into two pieces, one with no interest owed for several months. The bank filed foreclosure proceedings Feb. 9 in an attempt to pressure the theater into paying its debt. It filed a motion for default April 5 and a hearing is slated for April 24.

That foreclosure filing unravelled Cholerton’s efforts working out repayment plans for all the creditors, Walters said. News reports about the filing undermined attempts at fund-raising and sell subscriptions for the 2012-2013 season, Cholerton said last week.

Among the problems were that at least two of the last four shows, After the Revolution and The Elaborate Entrance of Chad Deity did not “meet expectations” for ticket sales. Cholerton said he dipped into its bond with Actors Equity union to pay its cast of it last show Working for the last week.

That triggers another set of problems, said Actors Equity spokeswoman Maria Somma. Paying anything out of that bond cancels the bond for the rest of the season and prohibits the union from approving the issuance of future contracts. The theater can buy a new bond if it first satisfies any outstanding money owed to the union’s pension, health, membership and vacation funds. Somma did not know if the Caldwell had such debts. Cholerton said Wednesday he could have created a new bond for a one-show season if they went ahead with Allapattah.

Aggravating the attempt to recover from the financial problems was transparency.  Cholerton had publically acknowledged the financial challenges for years and discussed the possibility of seeking Chapter 11 protection in February. In contrast, Florida Stage had been in fiscal trouble for some time but managed to keep it quiet while insiders tried to fix the financial situation, even selling season subscriptions during the weekend that the board of directors voted to shut down the theater.

Most observers have been highly supportive of Cholerton, a genial hardworking man who inherited the majority of the financial problems as well as some bad luck with the economy. The theater occasionally produced some critically lambasted work, but many of his recent productions have been lauded such as the thought-provoking new plays, Clybourne Park, Chad Deity and the Carbonell-winning world premiere of Michael McKeever’s Stuff. Some critics have complained that he changed the content of the Caldwell productions too quickly to retain the older mainstream audience that has been the company’s subscription base for decades.

The company’s financial troubles predate Cholerton becoming artistic director in May 2009. But his tenure coincided with a downturn in the economy, the real estate boom and bust, dwindling government support, all dovetailing with the fiscal fallout of a move into a new building whose price tag was nearly twice what was originally envisioned. Cash flow became a problem. Supporters filed lawsuits to press the theater to repay personal loans.

Some of the problem, Cholerton surmised, dates back 15 years when the core of the Caldwell’s subscription and donor base began moving to northern Palm Beach County where donors switched support to Maltz Jupiter Theatre and Palm Beach Dramaworks.

That also meant the demographics of the Caldwell’s Boca-centric base began skewing younger. More residents were parents of children requiring babysitting expense and shorter time away from home for nights on the town. It was simpler and sometimes cheaper to seek other alternatives.

A major problem was the new building. Caldwell co-founder Michael Hall had pushed for a decade to build a brand-new facility directly to the north of its home in the Levitz Shopping Plaza. When his board agreed, the plan was to raise enough money to have as small a mortgage as possible and to attract endowments, Walters said.  But plans to raze the Levitz for a major development accelerated the timetable ahead of the planned fund-raising.

“The Caldwell is unique in that they were very careful in the planning of their expansion, but their hand was forced,” Walters said.

Still, based on fund-raising pledges, such as $1 million from the Countess Henrietta de Hoernle, Hall spoke about the likelihood of opening the $5 million theater with a mortgage-burning ceremony. The money was nearly in hand, he said.

Then, cost estimates doubled after Hurricane Wilma in 2005 made construction materials scarce and the real estate boom jacked up construction prices. The scope of the new building had to be cut back on the drawing board and the theater had to assume a seven-year loan.

Besides broadening the subject matter, the company tried other avenues to attract new patrons. It hosted a story-telling series, rented out the house for concerts, gave the premises for staged readings of plays in progress as well as fundraisers like the 24-Hour Theater Project. A stripped-down series of plays was planned last fall in a program called Caldwell 2 at The Studio at Mizner Park, but the finances never came together. Among its most popular initiatives were concert versions of large cast musicals such as The Secret Garden and Sunday in the Park With George.

But the faltering economy has posed problems. The company hasn’t received state grants in years, and its county grant money has shrunk from $180,000 to $57,000. Donors have been hit by the recession.

The long-term solution for erasing the debt was to attract new donors and add fund-raising volunteers to its 18-member board of directors, which has five open seats, he said. The board hoped that a solid, feasible restructuring plan with concrete repayment schedules will win the confidence of donors who have balked at the financial instability. One plus was that long-time champion Patricia Hauben had pledged this winter to donate $270,000 over the next three years.

Caldwell Theatre Company was founded in December 1975 by Artistic Director Michael Hall and the late Frank Bennett, a scenic designer, at the urging of Rubbermaid Corp. founder James R. Caldwell.  Hall gave his audience familiar titles, but also mixed in contemporary works and even gay-themed plays during the summer off-season. Some of its most acclaimed works were the shows that constituted Hall taking a chance: Bent, Fortune’s Fool, The Laramie Project and Gross Indecency: The Three Trials of Oscar Wilde.

But after three decades and more than 70 Carbonell Awards, Hall began prepping a handoff to Cholerton, an actor/director who ran an investment advisory business. He joined the board of directors in 2000 and became chairman two years later. The two worked closely on the opening of the new theater and a smooth transfer.

“As much as we wanted to personally honor our ticket holders, it simply wasn’t feasible,” said Clive Cholerton.  “We continue to explore all of our options and will make a formal announcement when all the facts have been addressed.   We are incredibly appreciative of the generosity of Bill Hayes and Sue Ellen Beryl of Palm Beach Dramaworks and trust that ticket holders will feel they have been provided adequate consideration for purchase.”

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3 Responses to Breaking News: Caldwell Cancels Last Show; “Every Option Is On The Table” For Future

  1. sheila dubow says:

    as long time subscribers, and donors, we are distressed at your solution. we have lost money on our storytelling tickets (4 tickets) and now we will lose our money (2 tickets) for the final show of the season. we are part-time residents and will not be in florida to attend the dramaworks productions. sorry, but we will not renew a subscription if you go ahead next season. your subscribers have not been treated fairly.

  2. jill.sherman says:

    Talk to Florida Stage subscribers. I think they’d be grateful for the (any) gesture.

  3. Pingback: Breaking News: Caldwell Cancels Last Show; “All Options Are On … | Chapter 11 resources for Southern California

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