I don't know if charitable pledges are legally binding documents, but it doesn't really matter. File this one under cutting off your nose to spite your own face.
Pennsylvania Academy of Music sues donors
From Lancaster Online, which is the internet front for Lancaster Newspapers, Inc., the home for many an Amishland totalitarian "writer":Pay the $150,000 still owed — and past due — on their $240,000 multiyear pledge or get sued.
The Regitzes said they still wanted to see PAM's business plan, which they had requested two weeks earlier, to help them decide what to do.
The trustee didn't have the plan.
The Regitzes didn't write the check.
And PAM filed suit against them within hours.
"We feel we'd be putting our money into a big, dark hole. If we could see a viable business plan, which we've asked for and haven't gotten, we'd feel differently," Karyn Regitz said.
Before and since it filed for bankruptcy in May, PAM has pointed to $1.2 million in unpaid pledges from 28 donors as a key to its financial recovery.
It has urged those donors who are on track with their payments to accelerate their schedule.
Those who are behind in their payments were warned several times that PAM might sue to collect.
Monday, for the first time, it did. More suits will follow, said PAM attorney Jacques H. Geisenberger Jr.
"We have a duty to maximize our assets for the benefit of our creditors," he said, declining to say which donors PAM will pursue.
In a separate proceeding, U.S. Bankruptcy Court Judge Jean FitzSimon this week allowed PAM to occupy space in Liberty Place, as a lease gets finalized.
PAM will begin moving there Monday and start classes there Wednesday.
As of Thursday, 123 students had signed up.
Geisenberger indicated the figure could grow substantially because "the phone has been ringing off the hook with inquiries."
This spring, PAM had more than 300 students.
The dispute between PAM and the Regitzes symbolizes the schism that's opened between the academy and some of its previous supporters and leaders.
The Regitzes gave their pledge, payable in $40,000 annual installments, to PAM to fund a new building.
In return, PAM promised to put their name on the building's community room.
PAM completed the lavish $32 million building at 42 N. Prince St. in June 2008, winning widespread praise for investing heavily in downtown.
But the following summer, as the recession slashed its income while its operating expenses stayed high, its financial health soured.
William Regitz, a PAM trustee and retired Intel computer company division manager, and the rest of the board resigned amid a clash with PAM's founders over what to do.
Ultimately, this May, PAM not only filed for bankruptcy but lost the building, too.
To Geisenberger, PAM held up its end of the bargain, despite the recent departure from the center-city landmark.
"We built the building. We occupied the building. We put their name on the room. What else do they want us to do?
"We tried to retain the building, but it wasn't economically feasible," he said.
Karyn Regitz saw it differently.
"The money we donated was for the building. They don't have the building," she said.
"They want to use the money for operations. We didn't give the money for that."
Although the Regitzes had stopped their pledge payments, the couple continued to support PAM in other ways.
Most recently, they hosted a pool and barbecue party for 40 foreign students attending PAM's Vivace festival last month.
"We want to support them in ways that make sense," said Karyn Regitz, who served on numerous PAM committees over the years.
But until they see what they consider a persuasive business plan, that support will exclude a six-figure check, she said.
"We just feel we'd be flushing it. We've worked really hard for our money. We don't want to throw it away. We'd rather give to a viable organization, a sustainable organization," Karyn Regitz said.
She predicted that the lawsuit would backfire on PAM, hindering its ability to attract new donors and hurting the efforts of all local nonprofits trying to do so.
"They're going to have a very difficult time getting donors when they have a history of suing them.
"It's not only going to hurt them, it's going to hurt every nonprofit in the county … ," she said. "If people are afraid they'll get sued if circumstances change, it won't encourage them to open their wallets."
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