Please Touch Museum Files Bankruptcy, Settles Long Dispute with Bondholders
The Please Touch Museum has filed for Chapter 11 bankruptcy protection and has settled a long dispute with its bondholders.
The bondholders are getting $11 million to settle roughly $60 million in debt. It’s the culmination of two years of negotiations between the museum and its creditors.
The museum is now embarking on a $10 million fundraising campaign to raise money for the settlement and create new exhibits. That campaign must be completed by March 2016, at which point the reorganization process can be finalized.
The museum will remain fully operational during the bankruptcy process.
The problems at the museum, which first opened in a cozy space at the Academy of Natural Sciences in 1976, have been well documented: The institution is approximately $60 million in debt after borrowing to move from its longtime 21st Street home to palatial Memorial Hall in Fairmount Park. While it’s been a Philadelphia favorite for years and attendance has surpassed projections — running 10 percent higher than expected in 2013 — admissions revenue has fallen short. The problems are chronicled in detail here.
Nor have other revenue sources panned out as planned. Please Touch projected almost $1.8 million in donations for 2013, but received only $1.3 million; in 2014, donations dropped to around $945,000. And the $8.5 million expected from the sale of its former location? The 2008 recession dashed those hopes; the building finally sold for just $3.1 million in 2011.
In September 2013, Please Touch declined to pay either a $1.5 million debt payment or a $570,000 principal payment and began putting pressure on bondholders to restructure. When initial negotiations went nowhere and the museum continued to withhold payments, bondholders countered by threatening to sell museum exhibits and other assets.
Now, it appears, the museum is finally seeing a light at the end of a long, dark tunnel.
“Today’s filing puts Please Touch Museum on a path towards even greater success,” said Sally W. Stetson, chair of the board of directors. “To be very clear, the Museum will remain open. We are simply entering into a process to resolve the institution’s debt and position ourselves for lasting growth and sustainability. When the process is complete, the Museum will be on stable financial ground, have a strong foundation for the future and offer expanded programming.”