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Storytelling Center broke, files for bankruptcy

Staggering under a debt of at least $4 million, the International Storytelling Center filed for Chapter 11 Bankruptcy on Friday in the United States Bankruptcy Court for the Eastern District of Tennessee in Greeneville.
ISC President and founder Jimmy Neil Smith informed the public of the decision during a New Year’s Eve press conference held at the ISC in downtown Jonesborough.
In a news release, the ISC says it “is committed to a successful reorganization that will enable it to continue its contribution to the educational, cultural and economic enhancement of this region for many years to come.”
Among the creditors holding the 20 largest unsecured claims are: Tennessee Rural Development for a loan of $2.5 million; Bank of America for a loan of $270,237; First Tennessee Bank for a loan of $215,509; New Peoples Bank for a loan of $223,186; National Storytelling Network for a debt of $169,557; Hillhouse Graphic Design for services totaling $111,070; and Paramore Redd (an online marketing and interactive agency) for services totaling $50,277. Also listed is a $92,691 debt owed to Smith.
According to bankruptcy documents, the top 20 creditors are owed a total of $3.8 million. However, additional documentation estimates the total number of ISC creditors to be somewhere between 50 and 99, meaning even more money is owed.
Smith talked with the Herald & Tribune on Monday and confirmed that, while he is unsure of exact details at this point, both staff and salary cuts are being considered.
“Our operations are being evaluated by me and our staff in general and Sandy Reaves, our director of finance,” Smith said. “We’re a family, so we’re just going to sit down and discuss what is best for us and what steps need to be taken.
“We just have to make things more manageable.”
When questioned about the future of his own position with the ISC, there was hesitation in Smith’s response.
“As far as I know, I will still be here,” Smith said. “Our board and our staff have discussed the leadership, but at this point in time, the leadership will stay in place. That’s not to imply that it might not change in the future.”
Final decisions on leadership and other issues will be made by the ISC Board of Governors. The board is scheduled to meet in late February or early March, according to Smith, who indicated there are also several telephone conferences planned.
The ISC Board includes: Jim Reel, Chairman, Jonesborough; Dr. Andy Czuchry, AFG Industries Chair in Business, East Tennessee State University, Johnson City; Dr. William Kennedy, Hankins, Kennedy & Associates Vocational & Physical Impairment Consulting Services, Jonesborough; Stephanie Norby, Director, Smithsonian Center for Education & Museum Studies, Washington, D.C.; Lorna Stengel, performing storyteller, educator, and workshop presenter, Maine; Susan Williams, professor of management, Jack C. Massey Graduate School of Business, Belmont University, Nashville; and Smith.
Smith said he became concerned about the economic future of the ISC as early as 2008, after seeing festival revenues in 2007 plummet by 16 percent.
“We went through 2008-2010 under the negative impact of the recession. During that time, our financial position became very fragile. But it wasn’t until the last month or two that we realized it was time to take a different approach. This move was essential to maintain our viability as an organization. To not do anything would have been traumatic,” Smith said.
“We’ve done projections that indicate we can, with certain changes in operations, survive Chapter 11 and emerge stronger than ever. There is a step-by-step process that will take most of 2011. This is our opportunity to take the necessary steps to ensure the long-term sustainability. We want to make the most of it.”
Smith, who founded the National Storytelling Festival nearly 40 years ago, admitted this has been a very stressful time for him personally and for his staff. But he insists that the National Storytelling Festival, held annually during the first weekend of October, will remain much the same.
“We have no plans to diminish our product,” Smith said. “In fact, we will probably expand our product with more local and regional programming in order to encourage more attendance.”
He was reluctant to specify exactly what type of programming he was referring to.
“I can’t go into it yet,” he said. “It is really unformed at this point.”
Despite filing for bankruptcy, Smith says he is optimistic about the ISC’s future.
“My desire is to see this institution outlive me and to continue to be a force – a cultural, educational and economic force in our region and in our country – forever,” he said. “We have to have a solid foundation for the future to ensure the longevity for our organization.”
Meanwhile, Jonesborough Mayor Kelly Wolfe, who was also at Friday’s press conference, emphasized the importance of storytelling to the town as a whole.
“…Our identity as a town is closely associated with the National Storytelling Festival,” Wolfe said. “There is no question about the tremendous economic impact on our region from storytelling. Here in Jonesborough, our merchants, restaurants and hotels all benefit from its presence. It is our sincere hope that storytelling will continue to be an important part of Jonesborough for many years to come.”