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Storytelling in court April 26 to deal with NSN, town sides with ISC

The International Storytelling Center is returning to bankruptcy court on Tuesday, April 26, with a motion to extend its exclusivity period to file a reorganization plan for another 120 days.
The hearing will begin at 9 a.m. in the bankruptcy courtroom of the James H. Quillen United States Courthouse in Greeneville.
“The motion primarily concerns the rejection of the contracts with the National Storytelling Network,” said ISC counsel Mark Dessauer, of Hunter, Smith and Davis. “We need to have this resolved before completing our reorganization plan.”
Dessauer filed a motion Feb. 11 to terminate the three agreements the ISC formed with the NSN when the organizations split from what was once named the National Storytelling Association.
The first agreement involves restructuring to form the ISC and the NSN. The second describes the operation of the National Storytelling Festival, which is to be produced and run by the ISC. The third agreement is a settlement as a result of mediation in 2004.
A preliminary hearing was held March 29 on ISC’s motion to dissolve the relationship between the two organizations, but the NSN filed an objection.
The objection comes as no surprise since, per contracts, NSN receives 18 percent of the gross revenue from the annual storytelling festival.
A final hearing on the contested matter will be held Friday, June 3. Counsel for the parties must file a joint statement by May 27 setting forth any stipulations along with all factual and legal issues to be decided by the court.
The Town of Jonesborough is considering filing a statement in support of the ISC’s desire to break away from the NSN.
“Our interest is so the festival can continue because of the economic impact (it has) on Jonesborough,” said Town Attorney Jim Wheeler. “We are concerned about anyone else trying to put it on.”
The draft statement currently being considered for submittal by the town indicates the NSN has not been involved with the festival since the two organizations ended their partnership.
“NSN split with ISC in order to better serve its members, not the businesses and residents of Jonesborough. If the organization moved out of Jonesborough tomorrow, the move would have no impact upon Jonesborough. NSN has done nothing to help put on the festival, and the Town cannot train its personnel how to do it,” the draft states.
“In the event NSN controls the trademark of the festival name, the Town would most likely elect to exercise its option to revoke the permit and operate a festival itself, instead of attempting to work with NSN. The approval of the Town’s Board of Mayor and Aldermen of the National Storytelling Festival being held in Jonesborough in October 2011 is specifically contingent upon ISC running the event. The quality of the festival is too important, and the Town wants to see it remain as a top-notch event.”
Additional activity in the Storytelling saga includes applications recently approved by the Bankruptcy Court for interim compensation and the authority for the ISC to employ a public relations consultant, and a motion granted to approve the compromise and settlement of the ISC’s claims against Jimmy Neil Smith.
Following several instances of miscommunication and a premature announcement to the media regarding former New Orleans Hornets owner George Shinn’s interest, it became clear to ISC and its counsel that professional public relations assistance was needed, Dessauer said.
Shinn, who owns property in the Telford community, approached the ISC shortly after the bankruptcy filing regarding an interest in the organization. He met with the ISC Board of Directors and the ISC Creditors Committee, but did not submit a written proposal to either group.
The court filing states, “Mr. Shinn made it clear that any proposal that he would make would be conditioned upon him being in total control of the organization and the production of the Storytelling Festival….Mr. Shinn’s statements further indicated that he would change the cultural integrity of the Festival by using ISC and the festival as a springboard to advance his personal agenda.”
The document further asserts, “…it was the opinion of ISC’s counsel that neither he (Dessauer) nor the ISC staff was qualified to provide this level of expertise, and that a professional consultant was necessary and would be of substantial benefit to the debtor in counteracting Mr. Shinn’s publicity campaign that was inconsistent with the reorganization goals of the debtor.”
Mary Ellen Miller was employed as a public relations consultant for the ISC at a rate of $100 per hour, not to exceed $1,500.
In addition, Hunter, Smith and Davis, counsel for the ISC, requested payment of $37,330.91 in fees and expenses for the period of Nov. 29, 2010, through March 24.
The firm was retained with a $30,000 gift from an ISC benefactor, but the funds have been held in a segregated trust account. The approval of the application for interim compensation will enable the fees and expenses to be paid in part from the retainer or by the ISC.
The motion to approve compromise and settlement of ISC’s claims against Smith relates to a series of loans he made to the ISC. The proceeds of these loans were used by the ISC for working capital and were unsecured. As of the date of the bankruptcy filing, the ISC owed Smith $92,691.40.
During the 90 days prior to the ISC’s bankruptcy filing, two payments totaling $31,500 were made to Smith on his unsecured loans.
According to the motion, “It is the ISC’s position that the above payments to Mr. Smith are preferential transfers and…the debtor has made demand on Mr. Smith to return the $31,500 that he received during the 90-day period prior to the date of the debtor’s bankruptcy filing.”
Terms of the settlement state Smith agreed to return the $31,500 to the ISC, and he will now have an allowed unsecured claim in the bankruptcy case in the amount of $124,191.40.
Dessauer said additional creditors were also asked to return payments they received during the 90 days prior to the ISC’s filing for bankruptcy.