The University of the Arts in Center City filed for bankruptcy on Friday, September 13, the start of a process through which the 150-year-old school will try to sell its assets and pay its debts, the Philadelphia Inquirer reported.
The school closed for good on June 7 due to an “urgent” financial crisis fueled by a steep decline in enrollment.
University officials plan to use the sale of its eight real estate properties to pay off a $46 million bond debt and other liabilities. Unpaid bills to vendors, severance payments to staff, and reimbursement to students who paid deposits will be remitted after the school takes care of its secured debts.
The school’s total debt is $67 million and its assets are around $93 million, the Inquirer said.
“This filing comes as former students, staff, and faculty continue to struggle with the damage done to their educations and careers, and while the UArts Board has neglected its legal, contractual, and moral obligation to negotiate severance payments for workers affected by UArts’ collapse,” said Bradley Philbert, vice president of United Academics of Philadelphia, the faculty and staff union. “We will fight to make UAP members whole using every legal avenue available — the priority should not be bondholders or real estate developers, but the flesh-and-blood communities whose lives were upended by this disaster.”
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The bankruptcy announcement follows Temple University’s announcement in August that its merger plans with UArts ended without a resolution over objections from the Hamilton Family Charitable Trust, a family foundation that contributed about half of the school’s $62 million endowment. Members of the UArts community and elected officials including Governor Josh Shapiro had expressed hope that a merger might save the school.
“After an exhaustive effort by our internal and external team, we were unable to identify a solution that would be in the best interest of Temple’s community and mission,” Temple President Richard Englert and other top university officials said in a statement.
The bankruptcy filing is below:
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Photo: University of the Arts