December 2008 - DNTA Press Release Re Derby Playhouse...
Derby Playhouse Ltd in Administration – Saving The Playhouse?
Derby New Theatre Association wishes to make known its views surrounding the present situation and current proposals regarding Derby Playhouse and the company Derby Playhouse Ltd. (DPL)
DPL has implied that its proposals are for the purpose of “Saving the Playhouse”. We fear that this may not be the case and feel that the present proposals, as publicly presented, present a real risk of achieving the opposite result.
Mr. Stephen Edwards wishes to inject a sum of £45,000 to pay running expenses for a six month period, to allow time for the claims by DPL of maladministration against the Arts Council of England and Derby City Council (DCC) to be decided. This cash injection would, it is said, be secured by a mortgage to Mr. Edwards of DPL’s lease of the building from DCC.
The background is a little complicated, but there is a clause in the lease to DPL of the Playhouse stating that the building can only be used for theatrical performances. However this clause is made void if a mortgagee is selling the lease as part of a process of foreclosure. If DPL fails to repay Mr. Edwards’ loan or comply with its terms, Mr. Edwards is legally able to foreclose on the mortgage and sell the lease free of the restriction in the lease that the building can only be used as a theatre.
DNTA notes that Professor Powers and the Board of DPL value the lease at between £800K and £1 million, whereas, in stark contrast, the lease is not even listed as an asset of the Company in the Statement of Affairs produced by the administrators, Tenon Recovery. It seems clear that the value ascribed by the Board to the lease can only be realised on a sale of the lease for commercial purposes other than theatrical use. Indeed, Professor Powers has been quoted as saying that such a sale would provide the Board with capital to set up a theatrical operation somewhere else! Is this “Saving the Playhouse”?
There is one limited safeguard against turning the Playhouse over to other commercial uses, namely that planning permission would have to be granted for changing the use of the building to retail or any other usage, and the Council has already warned that such permission is unlikely to be granted. However, anyone who is refused permission for change of use is entitled to appeal against the Council’s decision and it is by no means impossible that a refusal of planning permission by the Council could be overturned on appeal. This would leave the way clear for the Playhouse to be abandoned as a theatre and turned over for commercial development.
We have substantial doubts as to whether the Board’s claims against the Arts Council and DCC are viable; it may well take considerably longer than six months for a decision to be made on both the claims and, even if one or both of the claims is successful, any compensation awarded may fall well short of the figure claimed by Professor Powers.
It is for the creditors who will vote at the Creditors’ Meeting on 16th December to assess for themselves the validity or otherwise of the proposals which are reported to have been made by Professor Powers. However, we feel it is important that the potential implications of acceptance of those proposals, i.e. the possibility of loss to the people of Derby of the Playhouse as a theatre, are understood. We invite Professor Powers and the Board of DPL to show that we are wrong.
Should the creditors vote to liquidate DPL, then the DCC offer would come into effect and Derby LIVE already has plans to recommence live theatre in the building at the earliest opportunity.
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