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Storytelling Center makes changes in wake of Chapter 11 bankruptcy filing

The International Storytelling Center is entering a new chapter in its tale of financial woes.
Jim Reel, chairman of the International Storytelling Center’s Board of Governors, told the Herald & Tribune that while the center’s future is still very much in the hands of the federal bankruptcy court, ISC leadership is busy making changes they believe will strengthen the organization for the future.
“We’re planning to come out of this, of course,” Reel said. “And we are planning to have our three main functions continue – the Storytelling Festival, the Teller-In-Residence program and the operation of our gift shop. Those are our main sources of revenue.”
But it isn’t going to be just business as usual at the facility.
“We’re trimming down. Salaries have been adjusted by 10 percent and we’ve let one person go,” Reel said. “After we see what direction the court wants us to go, there will probably be more adjustments.”
According to ISC President Jimmy Neil Smith, budget cuts totaling somewhere between $200,000 and $225,000 have already been made, with more being considered.
The ISC was scheduled to make an appearance in U.S. Bankruptcy Court on Tuesday morning to continue with its proceedings.
Meanwhile, a deadline for the organization to file its Statement of Financial Affairs and Schedule of Assets was extended from Jan. 14 to Jan. 26.
According to filings with the court system, the ISC owes money to more than 50 businesses and individuals. Debts owed to the top 20 of those creditors add up to $3.8 million, including $2.5 milion owed to Tennessee Rural Development for the construction of the center.
Among the smaller debts, the Town of Jonesborough is owed more than $2,600 in taxes from the ISC. According to Town Recorder Abbey Miller, the ISC is delinquent in filing its 2009 taxes and has through February to file its 2010 taxes before being considered delinquent for a second year in a row.
Although the ISC is a non-profit, tax-exempt organization, taxes must be paid on the gift shop portion of the facility, Miller noted.
The ISC also owes Washington County taxes, according to court documents.
Meanwhile, local businesses including the Eureka Inn, Main Street Cafe, the Historic Jonesborough Visitors Center and AmericInn were also listed as being owed money by the organization. Individuals who are owed money by the ISC include Jonesborough Alderman Terry Countermine, Limestone resident James Powell, local businessman Rab Summers and Jonesborough resident Tami Moore.
The ISC filed for Chapter 11 bankruptcy on Dec. 31, 2010, citing the last few years of plummeting festival revenues as its downfall.
A benefactor of the ISC reportedly paid $30,000 to retain Mark Dessauer, of Hunter, Smith & Davis, to represent the organization in the bankruptcy proceedings.
According to Reel, the ISC’s governing board is set to meet in late February to address the financial state of the organization and put a plan in motion as far as the future of the ISC.
The Board reportedly plans to keep Smith as the ISC’s Chief Operating Officer and CEO.
“But,” Reel said, “the board is going to take more of a direct hand in the finances. We’re going to help him and his staff. They’ve done a good job, but we need to be as rigid as possible.”
A major player in the plan to exercise more financial control will be the Board of Governor’s newest member, Sonia King, who was elected to serve on the board in January.
King is the daughter of the late Mary B. Martin, whose name graces the entrance of Storytelling Center Hall. It was named for Martin after Jim Martin made a $1 million donation to the ISC in late 2008 in his wife’s memory.
“(King) comes to us from one of the leading accounting firms in the United States and her experience as an accounting person will be very helpful,” Reel said.
King, who resides in Johnson City, will serve with Dr. William Kennedy on a two-person finance committee.
Reel said he is heartened by the response from both creditors and the committee during the ISC’s financial crisis.
“Most of our creditors have been very understanding. No one has gotten up in arms or said nasty things,” Reel said. “Most everyone’s reaction has been very favorable and supportive.”
A creditors’ meeting is scheduled to take place in U.S. Bankrupty Court in Greeneville on Jan. 31.

LIST OF CREDITORS:

Bank of America

Capital Bank and Trust

Capital One

Central Paper and Supply Co.

Dell Business Credit

Eureka Hotel

First Tennessee Bank

HSBC

Independent Publishers Group

Hillhouse Graphic Design, LLC

Capital One

Chattanooga Tent

Digital Fridge

Everything Gifts, LLC

Fresh Air Photographics

Historic Jonesborough Visitors Center

James Powell

Internal Revenue Service

AmericInn of Jonesborough

Brentwood Professional Center, Inc.

Central Heating and Air Co., LLC

City of Johnson City

East Tennessee Rent Alls

FIA Card Services

Gryphon House, Inc.

Horton Sports d/b/a

Jimmy Neil Smith

Jonesborough City Tax Collector

Mail Works, Inc.

National Storytelling Network

Peachtree Publishers, Ltd.

Pulp Printing

Richard McClain

Sam’s Club

Smithosonian Institution

Tennessee Department of Revenue

United States Trustee

Jonesborough Insurance

Main Street Cafe

New Peoples Bank

Penguin Putnam, Inc.

Rab Summers

River City Publishing, LLC

Saratoga

Spears Services

Terry Countermine

VAR Resources

Linda Wexler

Mark Carrier

Paramore Redd

Patricia Foster, Esq.

Pitney Bowes Purchase Power

Rae Dunn

Rural Development

SimplexGrinnel

Tami Moore

United Elevator Services

Washington County Trustee

William Kennedy