The Grove’s Too Broke to Go Broke : Stage: The theater company cannot afford the estimated $25,000-plus it would need to file for Chapter 11. Board is trying to find an alternative to liquidation.

GroveShakespeare, which canceled its 1993 season and went belly up this week in all but name, may be better off liquidating its meager assets than reorganizing its debts under federal bankruptcy laws.

That is the free advice a bankruptcy attorney has offered the Grove, which used to be the county’s second-largest professional troupe before its staff was laid off and its actors dismissed last week.

The 15-year-old theater company, which was considering Chapter 11 bankruptcy protection, is so broke it can’t afford the legal fees to file the petition.

Tom Moon, acting president of the four-man Grove board of trustees, said Friday that he had “no idea how complicated and expensive” it is to arrange a reorganization plan in federal bankruptcy court.

Consequently, he added, “the obvious thing is to liquidate. But I don’t want to do that. If at the end of 30 days we’re no better off than we are now, then we’ll have to.”

Moon said the Grove owes creditors a total of $259,062. The theater company owns virtually no assets “except for some costumes and a computer system that probably wouldn’t bring very much,” he said.

Moon said he had spoken with Steve Linkon, a bankruptcy attorney in Santa Ana, who confirmed Friday that his advice was sought on filing a Chapter 11 petition.

“I told him, ‘Why bother? Why not start over?’ ” Linkon said. “We didn’t go into specifics. But I told him it’s quite a lot cheaper to liquidate under Chapter 7. An angel could come in, buy the assets, turn around and give them back to a new Grove. And they’d have no debts.”

Linkon said the cost might easily exceed $25,000 for a Chapter 11 petition designed to stave off creditors while the company restructured.

Moon said he now hopes to approach creditors for a voluntary 30-day moratorium from any legal action while he and the three remaining board members “rethink their situation” and try to find an alternative to liquidation.

Five Grove board members, including the president, resigned earlier this week from what was a nine-member board. An interim artistic director, who had taken over the troupe after the artistic director’s resignation in May, also resigned last week.

Alex Nervo, the credit manager of the Donovan Lithograph Co., which is owed $14,303, said Friday he would be willing to give Moon the moratorium if other creditors do.

“At this point, it looks like we’ve lost our money anyway,” Nervo said.

The Anaheim printing company produced 40,000 copies of the Grove’s 1993 season brochures in April.

According to an inventory of debts prepared by the Grove’s former business manager, Steven Boyer, the theater also owes $7,902 to Jet Printers and $3,854 to Kinko’s.

The Garden Grove Redevelopment Agency gave the Grove $34,450 in April for advertising and marketing such as printed brochures and flyers.

City Councilman Bruce A. Broadwater claimed earlier this week that the Grove had mishandled that money by spending it on other things.

While that money has, in fact, been spent, the printing bills from Donovan, Kinko and Jet Printers--a total of about $26,000--haven’t been paid.

The inventory of Grove debts, which was provided to The Times, lists other outstanding advertising and marketing bills of more than $4,500, among a total of $113,615 in liabilities owed to about 110 businesses and individuals.

The document does not mention the 1,432 subscribers who are owed refunds Moon estimates at “about $80,000,” which is about 30% higher than the figure he estimated several days ago. Nor does it mention Barbara Hammerman, a former board member and chief executive who lent the theater $80,000 not long before she resigned in December.

In addition, the Grove owes $6,706 in play royalties, Moon said.

A grant of $11,000 from the Garden Grove City Council, awarded Tuesday to the theater, will go to pay salaries still owed to laid-off staffers and non-union actors, liability insurance and workers’ compensation, and an insurance premium to protect company officers from personal liability.

“That leaves us just about out of cash,” Moon said.

Meanwhile, he said he was heartened by calls from various small theaters that have phoned to offer their own productions as substitutes for the Grove’s canceled season, among them the Huntington Beach Playhouse.

And in the latest turn of events, the Grove’s former general manager--Charles Johanson, who resigned last October and is now executive director of the Los Angeles Gay Men’s Chorus--wants to offer a rescue plan with an associate, Kevin Cochran.

“We met with them,” Moon said. “Johanson wants to be appointed to the board. Cochran wants to be artistic director. We told them we’d be glad to have their help. But we’re not making any appointments right now.”

Johanson could not be reached for comment. He did not return phone calls to his office.