With ticket sales slipping and its 2016-2017 season cancelled, nonprofit Big Apple Circus Ltd. will attempt to juggle its draining liquidity and debt under bankruptcy court supervision.
On Sunday, Nov. 20, the New York circus petitioned for Chapter 11 relief in the U.S. Bankruptcy Court for the Southern District of New York in Manhattan, listing $3.8 million in assets and $8.3 million in liabilities. Judge Sean H. Lane was assigned to the case.
The Big Apple Circus, which has performed in cities across the country and most notably in New York City since 1977, requested to sell certain assets including its storage and training facility located at 39 Edmunds Lane, Walden, N.Y. The circus aims to restart its one-ring show, which runs seasonally in the fall and winter, at its home theater, the Lincoln Center for the Performing Arts in Manhattan, according to court papers.
In July, despite having a contract with the Lincoln Center through 2019, the debtor canceled all of its one-ring show performances scheduled for the 2016-2017 season after a June fundraiser, "Save the Circus," failed to raise $2 million needed to staff and market its October show, Big Apple Circus executive director Will Maitland Weiss said in a declaration.
"Despite receiving donations from over 1,400 different donors, as well as the continued financial support of the organization's directors, the circus was ultimately unable to raise sufficient funds," Weiss said.
The debtor is requesting to use a $66,058 zero-interest term loan as debtor-in-possession financing, provided by three of the circus' directors, to fund its Chapter 11 case until it sells the Walden facility. The loan is secured by a junior lien on the Walden property and will mature when the company closes on the sale of the facility.
"Unlike other well-known circuses run by corporate conglomerates, The Big Apple Circus, from its inception, has been a nonprofit organization focused on utilizing its funds to bring the joy and wonder of the classic circus arts to people of all ages and means," Weiss said in court papers.
Weiss said in his filing that Big Apple Circus' profits have fallen ever since the financial crisis of 2008. During its 2007-2008 season, the company generated $18 million in revenue from more than 350 shows in eight U.S. cities and towns. The circus estimated it would reel in only $11.9 million in revenue from performances for the 2016 year.
Although the Big Apple Circus is known for its Lincoln Center performances, it also puts on private shows, travels to various cities across the country and runs certain outreach programs such as "Clown Care," where "clown doctors" perform for seriously ill children at pediatric hospitals, according to court documents.
However, Weiss said in court papers that the circus' private event bookings have fallen to below 10 per year, while a competing nonprofit started a rival program to Clown Care, leading certain hospitals to cancel the debtor's performances.
Weiss also blamed in his declaration falling ticket sales on devastating events such as the Atlantic coast's 2012 Hurricane Sandy and the 2013 Boston Marathon bombing, which affected revenue at certain traveling shows during those years.
"While attendance has remained essentially flat at Lincoln Center shows (with a downturn in fiscal year 2016), attendance per performance decreased at most venues outside of New York City," Weiss said in filings.
As of its petition date, the Big Apple Circus employed four administrative workers and four part-time temps who manage the Walden facility. The circus employed an additional 30 performers who work the Clown Care and other after-school programs, Weiss told The Deal.
Weiss said all animals, "the dogs, horses and ponies," belong to a trainer and handler in upstate New York.
During 2010 and 2011, the Big Apple Circus made authorized borrowings against certain restricted funds, of which $1.65 million remains outstanding. The debtor also has $2.56 million in nonendowment loans outstanding, according to court documents.
The Big Apple Circus' largest unsecured creditors include Audienceview Ticketing (owed $426,623), Taft Foundation ($239,500), Billups Inc. ($236,762), Seiden Advertising ($202,947) and Centro Inc. ($198,510).
Natasha Labovitz and Christopher Updike of Debevoise & Plimpton LLP are debtor counsel.