Central Alberta Theatre has escaped bankruptcy after the majority of its creditors agreed to accept partial repayment of its total debt.
The troupe, which was formed 43 years ago in Red Deer, has outstanding debts of about $800,000.
In the fall of 2011, CAT opened the City Centre Stage in the building that formerly housed the Uptown Cinema. The situation deteriorated rapidly because of major cost overruns related to remodeling the City Centre Stage plus the additional expense of running two theatres.
In a letter last August to CAT’s members, the board revealed that they couldn’t afford to make all the Society’s payments. Considerable sums of money are owed to the builders, the bank, the City Centre Stage landlord and a number of other creditors. When put together the society had outstanding debts of over $700,000 at that time and monthly commitments it could no longer sustain.
“That was very unfortunate and it looked as though CAT was going to collapse. As mayor and council and the College we did not want to see that happen. That would not serve anybody’s interest. We worked with CAT and their financial people and their creditors to see whether or not they could salvage this and it appears that they have,” said Mayor Morris Flewwelling.
In recent months, the City of Red Deer and Red Deer College have worked together to help the theatre company.
“The City has been engaged in offering them a very small loan and providing them with some utility water access at a very favourable rate,” said Flewwelling.
RDC’s Donald School of Business, which bought the downtown building from CAT to operate lectures and events out of, will allow the theatre company to stage their productions there as well.
“CAT plays a really important part in the arts scene in our community, so it was important for us to try and help them,” said Flewwelling. “Another reason that the City is invested in CAT is because CAT operates the Memorial Centre on the City’s behalf. They look after the cost of operations and the revenue from that and it’s been a very successful marriage for the past 15 years.”
CAT has a five-year repayment plan which was accepted by the majority of their creditors and they also have a new five-year business plan as well. The business plan outlines hiring an operations director and also hiring staff.