THEATER NOTES : Bottom Line Is That the Plays Go On

When Theatre Corp. of America filed for bankruptcy protection last month, the organization’s President David Houk said the move would not affect the Pasadena Playhouse, which Theatre Corp. has managed since 1978. Playhouse revenues are used only to help support the playhouse, not for the less successful Theatre Corp. projects, Houk said.

Nonetheless, the playhouse is prominently mentioned in bankruptcy filings. The documents disclose that Pasadena Playhouse State Theatre of California, Inc.--the nonprofit group that hired Theatre Corp. to run the playhouse--is at the top of the list of creditors holding the largest unsecured claims on Theatre Corp.

According to the papers, filed March 10, Theatre Corp. owes Pasadena Playhouse State Theatre $2,458,562--the biggest single chunk of Theatre Corp.’s total liabilities of $9,935,106.

“Our contract with Theatre Corp. has included a guarantee that they will cover losses from the operation of the playhouse,” explained Al Lowe, president of the Pasadena Playhouse board. “In the early years, the losses accumulated, and Theatre Corp. kept absorbing them on their balance sheet and providing whatever was necessary.”

Lowe said his board obviously can no longer count on Theatre Corp. to pick up any new losses. “We’re now in a self-sufficient situation,” he said. “We’re dependent on our current revenues,” which have begun to rebound after a bad 1994.

Assuming that Theatre Corp. devises a court-approved plan to deal with its debts, the Pasadena Playhouse will be one of the beneficiaries, Lowe said. But in the meantime, he said, the debt is “not serious to the extent that it would make the Pasadena Playhouse fold.”

Houk said last week that he and his related partners and companies have invested $10 million in playhouse operations in addition to the $2.5-million debt mentioned above.

Other Houk projects are among the creditors of the Theatre Corp. For example, Houk Development Corp. is claiming $233,876, according to the bankruptcy papers.

After the playhouse, the second biggest Theatre Corp. debt is $537,592 for a five-year lease of stage equipment for the Theatre Corp.’s ill-fated series of musicals at the Alex Theatre in Glendale. The city’s Redevelopment Agency, which owns the theater, guaranteed the lease but also retained a right to reimbursement by Theatre Corp. if it couldn’t make the payments. Late last year, the agency bought the equipment outright, but it still wants to be reimbursed. Houk disputes this claim, but he said it was included on the list of debts in order to cover all possible bases.

The city of Glendale sued Theatre Corp. over debts incurred at the Alex, including $138,000 that Theatre Corp. borrowed from the city to put on its last show, “Fashion,” and the money Theatre Corp. received for subscriptions to the Alex’s aborted second season of musicals. Most of that case is now in abeyance pending the bankruptcy court’s approval of a plan to deal with Theatre Corp.’s debt.

But Houk maintains that two-thirds of the Alex subscribers already have been reimbursed by taking advantage of a Theatre Corp. offer of tickets to Pasadena Playhouse productions.

Theatre Corp.’s total assets at the time of filing for bankruptcy protection were $986,263, according to the court documents.