When Leonore Annenberg, widow of billionaire publisher Walter Annenberg, decided to give $50 million to the endowment of the Philadelphia Orchestra, she created a donor agreement stipulating in great detail how the money should be handled, and how the investment proceeds could be spent.

The 2003 gift, the largest in the orchestra's history, remains the keystone in the group's endowment, contributing up to several million dollars a year to the budget.

But turning over $50 million wasn't the end of the Annenberg Foundation's relationship with the orchestra. Although Leonore Annenberg died in 2009, the 12-page agreement bearing her signature remains in effect, and among the controls it outlines is a startling stipulation:

The foundation may ask for the money back if the orchestra files for bankruptcy.

The Philadelphia Orchestra Association filed for reorganization last month, unleashing fears that the Annenberg Foundation will try to reverse its munificence.

"I don't know the answer. That will be a board decision," orchestra president Allison B. Vulgamore said, referring to the Annenberg board, which consists of Walter Annenberg's daughter and three grandchildren. "What I am learning as I get to know the foundation is they have a very strong board that meets often to debate topics."

The Los Angeles foundation has retained David C. Ulich, a Los Angeles partner with Sheppard, Mullin, Richter & Hampton, who has filed notice to appear in the Orchestra Association's case, now before U.S. Bankruptcy Court Judge Eric L. Frank.

Annenberg Foundation executive director Leonard Aube said: "We're watching. Our trustees are voracious readers and are aware of the situation, but there's nothing actionable at this point."

On what the foundation might do, he said:

"I'm not offering a perspective either way. . . . It would not be appropriate to channel or anticipate the board."

Several observers close to the situation, who declined to be identified, said they could not predict whether the $1.7 billion Annenberg Foundation would try to recall the balance of the donation - a gift made, to a large extent, based on the warmth between Leonore Annenberg and former orchestra music director Christoph Eschenbach. Both Annenbergs had a long history of interest in the Philadelphia Orchestra and the Academy of Music, giving about $100 million over several decades to both institutions.

But the clause claiming the foundation's right to take back the money adds considerable risk to the orchestra's April 16 decision to file for reorganization.

If the judge decides that bankruptcy claims can be paid out by "invading" the orchestra and Academy of Music's $140.5 million endowment, orchestra leaders and others said, the Annenberg Foundation might be more likely to press for its portion.

That scenario could compel the orchestra to consider withdrawing its bankruptcy petition, said one person familiar with the orchestra's relationship with the foundation.

An orchestra spokeswoman declined to provide a current market value for the Annenberg funding.

Vulgamore said she had prepared the foundation for the bankruptcy decision. She flew to Los Angeles in the fall to discuss the orchestra's situation generally with Aube.

"I previewed all of the issues and sought his counsel, and wanted to understand their current thinking," said Vulgamore. She continued to update the foundation as decisions regarding bankruptcy were made, she said. "I think we've been good communicators, we've been thoughtfully engaged with them, and I think they understood the reasons."

The Sept. 15, 2003, agreement between the orchestra and the Annenberg Foundation - The Inquirer obtained a copy several years ago - split the $50 million among four funds in the endowment: for education ($15 million), touring ($15 million), artistic endeavors ($10 million), and media and technology ($10 million).

Like any donor agreement, the document is a marriage of dreams detailed by the orchestra and controls stipulated by the donor.

"Frankly . . . I was full of these ideas and full of these visions," Eschenbach said in 2003, "but in the back of my mind I had a lingering worry [about how] to put them into reality because of the gap between the endowment of this orchestra and the endowment of others."

Much of the contract pertains to cut-and-dried matters, such as how much investment income may be drawn from the money each year and the orchestra's reporting requirements to the foundation. One section dictates that the orchestra "shall not, directly or indirectly, under any circumstances, use any of the spendable income from the funds for or against any union matter of any kind or any matters related thereto."

But language crafted by the foundation blooms more poetic at one point when expressing the aspiration expected in exchange for a gift of this size:

"As a cornerstone in the cultural life of the region, the orchestra represents that it shall not be content to merely maintain its existing strengths and the quality of its performances, but shall focus on striving to attain the highest standards of excellence in every indicia of achievement. The orchestra shall broaden its artistic view and exhibit the regional, national, and international leadership necessary to encompass a cosmopolitan perspective that embraces growth, innovation, and adaptation to both social institutions and the needs of the populace."

However well a post-bankruptcy orchestra lives up to those ambitions, the gift has served as a testament to the Annenbergs and the considerable philanthropic figure they cut in the Philadelphia region.

That presence has dimmed since Leonore Annenberg's death, when the foundation completed a generational handover and shifted its headquarters and focus from Philadelphia. The board consists of Wallis Annenberg and her children Lauren Bon, Gregory Annenberg Weingarten, and Charles Annenberg Weingarten.

None of them lives in Philadelphia. Most of their current largesse is directed to California institutions and projects, according to the foundation's database of grants of $50,000 or greater.

The recent Philadelphia International Festival of the Arts was funded with a $10 million pledge in 2008 that became Leonore Annenberg's final grand civic gesture.

But in 2010, only two local groups received Annenberg money: the Eisenhower Exchange Fellowships Inc. and the University of Pennsylvania Museum of Archaeology and Anthropology, whose board of overseers includes Gregory Annenberg Weingarten.

So far in 2011, the database shows, no gift has been awarded to a Philadelphia institution - though a $20,000 grant was given to an Arizona group to document the creation of a public soil center in Philadelphia "to demonstrate ways to increase the health of soils in an urban setting."

The $50 million gift to the orchestra was not only the ensemble's largest ever, but also the second largest to any U.S. orchestra at the time.

Orchestra leaders described its effect on the institution as "transformational."

Said then-president Joseph H. Kluger after signing the agreement: "It's going to give us the resources to maintain competitiveness with our peers, and the resources to be successful in the 21st century."

Contact music critic Peter Dobrin at pdobrin@phillynews.com or 215-854-5611. He blogs at www.philly.com/philly/blogs/ artswatch