Derby Playhouse given a month to formulate rescue plan

Published Tuesday 13 May 2008 at 14:55 by Alistair Smith

Derby Playhouse has four weeks to save itself, after a deal was reached between Arts Council England and the theatre’s artistic director to prevent the company’s immediate liquidation.

The theatre had been faced with permanent closure, following the arts council’s decision to claim back more than £1 million of funding from the venue after the company had gone into administration. ACE has now withdrawn that claim and committed to only renewing it if Derby Playhouse Ltd goes into liquidation or receivership.

“They now have no rights while the company is in administration,” explained artistic director Stephen Edwards, who had challenged ACE’s claim through the courts. “Before they had wanted a right of veto over any proposed rescue plan. The new settlement clearly states that ACE can have no influence on the company while we’re in administration, which is key. They had fired the gun and I caught the bullet. Now, they have agreed to put the gun away.

“We have now got about four weeks to put together a business plan to put to the administrators. We are looking to borrow money against the value of the theatre building. The company owns the theatre and there is provision within the lease to use the equity of the building to finance the company.”

According to Edwards, the playhouse is valued at around £3 million, although the company will need nowhere near that amount of money to get up and running again. He added that he was hopeful that administrators Tenon Recovery would accept the company’s rescue plan as he felt the theatre now had a “first-class finance team” working on the proposals.

The playhouse first closed at the end of last year, after the company encountered financial problems and the city council refused to advance the venue its grant. Subsequently, Arts Council England removed the playhouse’s regular funding. Derby Playhouse Limited was forced into administration and ACE instigated a claim for more than £1 million of subsidy to be returned to it, as a creditor of the theatre.

Because it was owed more than all the theatre’s other creditors combined, it was able to effectively veto a proposed rescue plan put forward by the company. Following this action, Edwards, who was also a creditor of the theatre as well as its artistic director, issued a legal challenge against ACE’s claims.

The arts council has said it has withdrawn its claim, while the company is in administration, to avoid a “costly court process”.

Derby Playhouse chairman Jonathan Powers commented: “The board is grateful for the courage and tenacity of Stephen Edwards in taking this action. Thanks to him we are now back where we were in February. We have a plan to get the theatre up and running in the autumn. It will be a leaner and battle-hardened organisation. It will need support and commitment from the people of Derby and Derbyshire and from the theatrical profession to ensure that world-class professionally produced theatre can once again thrive in Derby, on our stage, in our building, for the next 60 years.”