Three months after shutting down, Philadelphia’s University of the Arts files for bankruptcy

Following its abrupt closing on 7 June, the College of the Arts (UArts) in Philadelphia filed for chapter seven chapter on 13 September. The submitting got here after negotiations to avoid wasting the college through a merger with Temple College broke down.

In keeping with its chapter submitting in Delaware, the college has liabilities of between $50m and $100m and property valued in the identical vary. The doc additionally reveals that the college’s lawyer, Richard G.Placey of the Delaware-based agency Montgomery McCracken Walker and Rhoads, has already been paid over $1m in authorized charges.

Going by way of the chapter course of will finally enable the college to promote a number of invaluable actual property holdings it owns in Philadelphia’s Metropolis Middle neighbourhood, that are estimated to be price round $87m. From the sale of those properties, the college hopes to make good on its $46m bond debt.

On 31 Might, UArts board chair Judson Aaron and president Kerry Stroll introduced that the 150-year-old college would shut in seven days. They cited low enrollment, monetary points and elevated prices as the explanations. This resulted in a number of class motion lawsuits which were introduced towards the college, allegations of unfair labour practices and an ongoing investigation by Pennsylvania’s legal professional common, Michelle Henry. The union that represents each workers and college on the college can be suing the college for failing to barter with their employees for severance.

“The board of trustees at UArts, led by board chair Jud Aaron, has chosen at each flip to obfuscate the reality and forestall all penalties of their disastrous mismanagement of the college,” a spokesperson for the union mentioned in an announcement. “This submitting comes as former college students, workers and college proceed to battle with the injury achieved to their training and careers, and whereas the UArts board has uncared for its authorized, contractual and ethical obligation to barter severance funds for employees affected by UArts’ collapse. We’ll battle to make [union] members complete utilizing each authorized avenue obtainable—the precedence shouldn’t be bondholders or actual property builders, however the flesh-and-blood communities whose lives have been upended by this catastrophe.”

The college’s abrupt closure got here 4 months after a contentious bargaining course of between the union and directors that went on for over a yr resulted in a contract. The union “is constant to assist members by way of unemployment workshops, healthcare entry workshops and solidarity fund funds”, the union spokesperson informed The Artwork Newspaper. “And we’re working with our authorized assist and political allies to proceed to battle for [Worker Adjustment and Retraining Notification Act] and severance funds for our displaced members.”

Officers at UArts couldn’t be reached for remark as of press time.

The closure of Uarts comes at a time when US universities face a bunch of pressures, from falling enrolment and rising prices to elevated scrutiny over free speech and campus protest points. A number of artwork schools and universities have both merged with different establishments or have shuttered completely lately. Most lately one other Philadelphia establishment, the Pennsylvania Academy of Effective Arts, introduced it’ll stop all degree-granting actions in 2025. And in 2023, after years of economic struggles, the storied San Francisco Artwork Institute closed and filed for chapter. Earlier this summer season, leaders on the California School of the Arts revealed that the establishment is going through a $20m deficit and should must make drastic adjustments to regain its monetary footing.

Different artwork faculties have managed to keep away from complete collapse by merging with bigger universities. Earlier this yr, the Vermont School of Effective Arts introduced a novel resolution to its monetary straits: it’ll merge with the California Institute of the Arts, a college 3,000 miles away. The Faculty of the Museum of Effective Arts in Boston turned a part of Tufts College in 2016. In 2014, the Corcoran School of Artwork and Design dispersed a lot of its everlasting assortment and its educational programmes turned a part of George Washington College.