World Cafe Live files for bankruptcy
The embattled University City venue plans to remain open.
World Cafe Live has filed for bankruptcy protection.
The University City music venue has been embattled since last spring, shortly after a new management team headed by Joseph Callahan took over from founder Hal Real.
Last month, a CEASE OPERATIONS — STOP WORK ORDER notice was taped to the entrance of the venue “by order of the Department of Revenue” of the City of Philadelphia, citing a “serious tax violation.”
The deadline for the venue to come to terms with the city was Wednesday.
LiveConnections.org, the music education nonprofit that is the parent company of World Cafe Live, and Real Entertainment Philadelphia LLC both filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania on Tuesday. A bankruptcy filing can delay enforcement of a stop work order.
The filing was first reported by the Philadelphia Business Journal. Neither Callahan nor J. Sean Diaz, who has been the World Cafe Live’s CEO and president since September, responded to a request for comment in time for publication.
Diaz, an entertainment lawyer and artist manager who Callahan has authorized to execute the bankruptcy filing, told the Business Journal in a statement that the venue has no plans to close.
Diaz wrote that Chapter 11 “provides a responsible framework to restructure the organization, attract new capital, and ensure that this important cultural institution continues to serve artists and audiences for years to come.”
Real Entertainment LLC is named after Real, who founded World Cafe Live in 2004 and was CEO until stepping down and making way for Callahan, an entrepreneur and technologist with plans to turn the venue into a virtual reality hub. Real converted the venue, whose downstairs Music Hall holds 650 and upstairs Lounge has a capacity of 220, to nonprofit status in 2018.
In an email to The Inquirer this week, a spokesperson for the Department of Revenue said that because of confidentially laws it could not comment of specific tax cases or say whether the World Cafe Live had paid its delinquent tax bill.
» READ MORE: World Cafe Live CEO says there is ‘zero probability’ of the venue closing as staff moves to unionize
The bankruptcy filings state that the nonprofit World Cafe Live, “is unable to pay its debts as they mature” making it “necessary for the company to reorganize.”
“Joseph Callahan, sole member of the Company” has resolved that “it is in the best interests to reorganize” and “seek relief under chapter 11” of the U.S., bankruptcy code.
The debts of the World Cafe Live, are ample.
The bankruptcy filing lists both LiveConnections.org assets and liabilities as between $1 and S10 million and details over $2.4 million owed to 20 creditors.
Those include: $563,142 to the Delaware Valley Regional Economic Development Fund; $205,496 to the Pennsylvania Department of Revenue; $154,915 to the University of Pennsylvania, the World Cafe Live’s landlord who owns the building at 3025 Walnut St. That building also houses Penn radio station WXPN-FM (88.5), which is a separate business.
In July, Penn served the World Cafe Live with an eviction notice over what it claimed was $1.29 million of unpaid rent and utilities dating back to 2022, beginning during Real’s tenure as CEO. The World Cafe Live countersued and the venue has remained open as the case continues.
Other creditors include Nashville songwriter Ruston Kelly, who played the Music Hall in October and is owed $10,000, and the Pennsylvania Liquor Control Board, owed $15,145.61.
In November, World Cafe Live’s liquor license lapsed for a period of several weeks due to unpaid fees. During that time, WXPN’s Free at Noon shows moved to Ardmore Music Hall, while shows went on at World Cafe Live on a BYO basis — ticket holders were charged a $20 fee if they wanted to drink their own booze during a show.
In the short term at least, WXPN’s Free at Noon shows have not announced any plans to again move out of World Cafe Live. On Friday, Canadian power-pop band New Pornographers and Philadelphia songwriter Alex Savoth are both scheduled to perform in shows presented by the station during the noon hour.
World Cafe Live has been wracked with labor strife since workers walked out during a Suzanne Vega concert in May, complaining of “unfair treatment” and light paychecks.
Labor peace seemed to be achieved during a rowdy town hall in July, when then-World Cafe Live president Gar Giles said the company had agreed to collective bargaining with production and front-of-house workers who unionized with IATSE Local 8 and Unite Here Local 274. But in the fall, labor organizers said the venue reneged on that promise.
Last week, former World Cafe Live workers who are organized online as Save World Cafe Live delivered a petition to the office of Ed Datz, Penn’s executive director of real estate, calling on the university to retain the former staff “if and when the current operators are evicted.”
Shows are listed on the calendar though June, This weekend, the Day 26 R&B Experience Tour with Avery Wilson and Bianca Bonnie is scheduled to play in the Music Hall on Friday night and a real estate seminar called the Wealthy Experience is happening on Saturday afternoon at the Music Hall.
Elizabeth & the Catapult is scheduled for April 11, a George Harrison tribute play April 18 and Martha Wash is on June 27.