The board for the bankrupt New York City Opera said Thursday that it still wanted to sell the company’s name and few remaining assets to its preferred suitor, even though another bidder offered $250,000 more for them at an auction in court earlier this week.
The announcement was made in a conference call Thursday morning with attorneys for most of the interested parties and Judge Sean H. Lane of Federal Bankruptcy Court in Manhattan, who would have to approve any sale of the company’s assets. A lawyer for the group that was passed over despite making a higher bid indicated that he would challenge the decision at a hearing.
The board of City Opera has long favored a group called NYCO Renaissance, which is backed financially by Roy G. Niederhoffer, an investment manager who served on the board. Its plan calls for putting on operas at the Rose Theater at Jazz at Lincoln Center, and for making Michael Capasso the general director of the new company — though his former company, Dicapo Opera Theater, faltered and still owes back pay to its musicians and singers.
But their bid of $1.25 million in cash for City Opera’s name and assets, including its thrift shop on East 23rd Street, was topped by a $1.5 million bid from a rival group called Opera New York. That group is led by Gene Kaufman, an architect. Lawyers for the City Opera board have accused him in court papers of exaggerating his support from other opera groups.
The lawyers said they were looking for the “highest and best” offer for the opera company’s name and assets. “In the debtor’s view the economic difference between the two bids is simply not enough to overcome the material difference in the substance of the two proposals,” Nicole Stefanelli, a lawyer for the opera company, said on the call. “In the debtor’s business judgment the NYCO Renaissance proposal is more thorough, and represents a far better proposal for continuing the debtor’s mission.”
A lawyer for Mr. Kaufman, Arthur Steinberg, questioned that decision, and alluded to the fact that lawyers for the board and a committee of creditors said at Tuesday’s hearings that they were ascribing a $200,000 value to the greater detail of NYCO Renaissance’s bid.
“Each time we had a bidding interval we had to bid a couple of hundred thousand dollars more because that was the debtor and the creditors committee’s representation of how they viewed the ‘better’ aspect,” he noted. In the end its bid was $250,000 higher.
Neither side has made the details of its plan public.
Sean C. Southard, an attorney representing a committee of City Opera’s creditors, said on the call that the committee did not yet have a position on which bid it supported. But he said that pension funds that are among the company’s biggest creditors had made a proposal that he said would effectively “eliminate the economic impact of the bid differential between the Kaufman and the NYCO Renaissance bids.”
Mr. Steinberg complained that the proposal was made after the auction was concluded, and asked for time to get documents and depose witnesses before a hearing. “If we’re not going to have the hearing today, then I do think that I should be able to try this not by ambush, because that is what I feel like has happened here,” he said at one point.
A hearing had been planned for Thursday afternoon, but was postponed because a member of City Opera’s board who was to be called as a witness was having surgery.