Arts council puts £1m Derby Playhouse claim on hold

Published Tuesday 22 April 2008 at 14:45 by Alistair Smith

Arts Council England has temporarily suspended its claim to more than £1 million of funding it had demanded be returned by Derby Playhouse after the company went into administration, in a bid to avoid a “costly” court case.

The Playhouse’s former creative producer, Stephen Edwards, had challenged ACE’s claim through the courts to prevent Derby Playhouse Ltd being liquidated, after the arts council had essentially vetoed a proposed rescue plan put forward by the theatre’s board.

Because ACE’s financial claim was larger than those of any of the playhouse’s other creditors, its vote carried the most weight and it was able to reject the plan outright. However, ACE has now offered to suspend its vote, so that the proposals can be put to the other parties.

An ACE spokesperson explained: “ACE has a duty, under the Lottery Act, to pursue the return of lottery funds if they are not used for the purpose for which they were granted. The administrators of the Derby Playhouse accepted the arts council’s claim as a creditor but Stephen Edwards challenged the level of that claim through the courts.

“We remain unconvinced that the rescue plan for the theatre is viable but we have concluded that allowing the board to present its case to the administrators and creditors is a less costly route for public funds than pursuing a court case at this time. We hope to reach agreement with Mr Edwards outside of a costly court process but we are not setting aside our claim. In the event of the company going into receivership or liquidation we will pursue it. Our priority, as always, is to ensure that the Derby Playhouse site remains available for live produced theatre.”

Edwards is currently considering the offer and negotiations are still ongoing.

Former Playhouse chief executive Karen Hebden told The Stage: “Negotiations are taking place between both parties [ACE and Edwards]. We have to ensure that the arts council cannot force this company into liquidation and that it cannot prevent the rescue package that the board wants to see take place from happening.

“Should the case resolve in Stephen’s favour, it is the board’s intention to put together a rescue package that will repay the creditors and reopen the theatre.”

She added that no future creditors’ meeting had yet been scheduled.