LENOX -- Shakespeare & Company officials say they have a "solid foundation" financially thanks to agreements with their debtors, moves that come just eight months after an audit revealed the theater company needed to make significant changes to remain afloat.
Shakespeare & Company announced on Monday it had reached an agreement to refinance nearly $8 million in debt, while also reaching an out-of-court settlement with Allegrone Construction regarding the remaining payment on $7 million in work the contractors provided.
"This is a gigantic seal of approval that we, in fact, are moving forward and strengthening our position," said Jeremy D. Goodwin, a Shakespeare & Company spokesman.
The company has refinanced its debt with Century Bank in Medford by paying off a small, high-interest loan and consolidating the remaining outstanding debts into two new notes and the 30-year mortgage on its 33-acre facility on Kemble Street.
The refinancing will reduce the company's annual debt payment from approximately $550,000 to $300,000.
Century Bank has also re-ceived a guarantee through the U.S. Department of Agriculture on $3 million of the company's debt. U.S. Rep. John Olver, D-Amherst, who helped facilitate the USDA's backing, called Shakespeare and Company an "invaluable cultural resource for the Berkshire community," and called the restructuring presented by the company a "solid plan."
Meanwhile, the settlement of the
Goodwin declined to comment on the details of the repayment, but did confirm that the suit stemmed from the company's inability to fully pay Allegrone at the time of the project's completion.
Representatives from Alleg-rone did not immediately return calls for comment.
Gerald Algere, Century's senior vice president and group head for nonprofit banking, said the USDA backing and the Allegrone payment, covered by a Shakespeare & Company endowment, aided in providing the cover and confidence needed to refinance the loans.
Goodwin said these resolutions are not a cure-all for the company's financial struggles and they were still working on an "austere" budget. But, he said, these moves give them the "breathing room and the flexibility needed to move forward."
The recent financial woes came to light in October 2009 when an audit by the Nonprofit Finance Fund found the company needed to come up with $10.45 million by this April to remain solvent, including refinancing nearly $8.15 million in debt.
Since that time, the company began instituting a new business model including cuts to the budget, consolidating departments, and a hiring freeze and 10 percent pay cut for staff. Ten employees were laid off before the audit was released.
And after setting attendance records this past year, administrators believe this fiscal year will be the first in some time where the company will be operating with a balanced budget.
Nicholas J. Puma Jr., the company's managing director, said the company will closely monitor the budget going forward, while maintaining the quality of the education, training and performances the company is known for.
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