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CU offers credit line for bankrupt Philly orchestra
MAUMEE, Ohio (10/6/11)--Sun FCU in Maumee, Ohio, has agreed to finance a business line of credit for the Philadelphia Orchestra, one of its sponsor groups. The orchestra will use the $3.1 million debtor-in-possession loan for operating expenses as it works to reorganize and emerge from Chapter 11 bankruptcy filed in April. Sun FCU has offices in Toledo, Ohio, and Philadelphia. Unlike other bankruptcies, the orchestra has no creditors, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Oct. 5). The orchestra said it intends to use Chapter 11 to gain relief from pension obligations, secure a new lease with the Kimmel Center where it performs, and structure a new union contract with musicians. Collateral for the loan will include fine instruments owned by the orchestra, contents of the orchestra’s musical library, real property and other business assets. “Understanding the unique needs of the Philadelphia Orchestra as an employer to many of our members is essential in carrying out our mission of caring service at Sun Federal,” Dale Frankhouse, Sun Federal director of business services, told PCUA. “It is our privilege to partner with the orchestra to help ensure its long-term sustainability as a valued part of the Philadelphia community and culture, and its enduring prominence in the world of music.” The $401.9 million asset Sun FCU has been serving members of the Philadelphia Orchestra since 2003 when the Philadelphia Orchestra FCU merged with Sun FCU. Sun FCU served the needs of orchestra musicians and employees long before it entered discussions with the orchestra’s management about a possible business line of credit, PCUA said. The credit union’s product offering includes a business loan tailored to the needs of professional musicians. The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity for credit unions to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.


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