Legal Topics

What Is Behind Philly’s University of the Arts Abrupt Closure?

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You may have heard the disconcerting news that the 150 year old University of the Arts (UArts) in Philadelphia abruptly announced their closure last week, less than a year after Pennsylvania Academy of the Fine Arts announced they were discontinuing their bachelor and master of fine arts degrees.  What is particularly galling about the closure is that faculty and students weren’t informed that the school would be closing a few days later and heard about it via media sources.

In addition, the manner in which they made the announcement resulted in the school immediately losing its accreditation.  Apparently, the accrediting agency told them on May 28 that their accreditation was renewed for another few years. The next day UArts told the agency they were going to close in a few days and the agency pulled accreditation pretty much immediately in response to the fact the school was giving such short notice and had not arranged for teach out agreements to help students transfer to other schools.

This reminded me of the closure of Sweet Briar College that I wrote about in 2015.  There were all sorts of questions about how that decision came about, especially since the school had accepted a million dollar gift two weeks before the board decided to close the school. In that case, the alumnae rallied to call for the resignation of the president and board for not properly exploring options to keep the school open.  The school continues to operate today.

I am not suggesting UArts is in a position to be saved. A number of universities have been closing in recent years. Last week Marymount Manhattan merged with Northeastern University due to declining enrollments.  The merger was a result of discussions over the course of a number of years.

Clearly the difficulties UArts faced didn’t just emerge over the course of a week. The faculty just ratified its first contract in February after three years of negotiation, but according to a recent article on the closure, there was no indication of financial problems at that time.

“Part of what makes this so shocking and outrageous is that at no point was there any indication from the senior leaders at the university … that the university’s finances were this precarious,” faculty member and union representative Bradley Philbert told Hyperallergic, adding that within the last three months, the university has hired between four and six staffers.

“This is not just something that happened overnight,” Philbert said.

Others have mentioned the abrupt closure is likely a violation of the WARN Act which requires large employers to provide 60 days notice of layoffs and closures.

Instances like these make me wonder what sort of legal advice and guidance these boards have been receiving. Likewise, who was making decisions about internal and external communications that none of this information was shared with any of the school’s constituencies.  In the end, I wonder if there are parallels with Sweet Briar in that the UArts board may have decided to shut everything down without due consideration about the process.

More Untruth In Advertising

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Over the course of the years, I have written on the practice of chopping up reviewer quotes and fitting things back together to make it sound like the critic enjoyed the show. It is called contextomy, by the way.

Thanks to Rainer Glaap who sent me another great example written by reviewer and columnist David Benedict for The Stage.

Benedict cites one example where Ben Brantley, former critic for the New York Times and Jesse Green, the person who replaced Brantley, were both recently had reviews of a show quoted even though Brantley left the paper over three years ago.

Beneath the words “True art sparks debate”, the ad quoted opposing one-liners from two Times reviews: “A stirring blockbuster” – Ben Brantley and: “An overeager blur” – Jesse Green.

….But Schulman smelt a rat, not least because Green succeeded Brantley as the Times’ theatre critic more than three years ago. Brantley’s review was for an earlier incarnation of the show way back in 2018.

It gets worse. None of the words quoted from either critic appeared in print consecutively. Those phrases were assembled from words that weren’t originally even in the same paragraph, let alone sentence.

Benedict recounts an instance when he was having lunch at a friend’s house and told the other guests about how he was misquoted in an advertisement for a show in which he wrote:

“The Sweeney Todd sequence is built around the rhyme: ‘He’s got a chopper/ Oh, it’s a whopper.’ If schoolboy innuendo is your bag, book now.” Passing the Duchess Theatre a little later, I was less than pleased to see my name outside accompanied just two words from my review: “Book now.” After my complaint and much-feigned innocence and wringing of hands, the producers finally took it down.”

The twist to this story is that apparently that specific anecdote was used in the development of truth in advertising law for the European Union–only now that the UK has left the EU, it isn’t applicable.

To my astonishment, one of the lunch guests piped up: “It’s you! I know that story because I drafted the EU directive on false advertising. You’re cited in European case law.” The trouble is that post-Brexit, EU directives no longer apply.

Benefits Of Incorporating Your Arts Career

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h/t Artsjournal.com for linking to a really valuable article on Observer about considering creating a limited liability corporation (LLC) if you are an artist.  I recently created a post on ArtsHacker summarizing some of the ways in which an LLC protects artist’s personal assets in the case of lawsuits and in some cases, divorce proceedings.

This excerpt from Observer article summarizes how an artist would operate after forming an LLC:

….but most artists operating as one-man shops set up limited liability companies, according to Powers, where the LLC is the employer and the artist is technically the employee. When a sale or commission is made, the money is paid directly to the corporate entity, which then pays the artist, either in a lump sum or in increments (as a salary), and the artist pays taxes on that money as ordinary income. But not all the money transfers directly through to the artist. The corporate entity retains some cash to purchase art supplies, health insurance, workmen’s compensation to protect employees who may get injured during transit or installation, commercial premises and liability insurance—and, assuming the artist is successful enough, to hire employees or consultants.

The article discusses a number of legal scenarios an artist might find themselves in which the buffer of an LLC would be beneficial. More than just providing legal protection, they also note that forming an LLC would allow the artist to solicit investment to support their work.  Take a look at the ArtsHacker post or go straight to the article to learn more.

 

Should Your Work Be Protected By An LLC?

Cleveland Ballet Issues Turned Out To Be Much Bigger Than Initially Suspected

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Back in November, I had written about allegations of harassment by the administration of the Cleveland Ballet of one of their teachers due to body weight issues. I thought that would more or less be the last time I wrote about that particular accusation. However, the results of the investigation by the ballet board has turned into a lesson about boards exercising better organizational oversight.

According to a recent news story, the CEO, Michael Krasnyansky, was essentially forced to resign when the board investigation started and credible accusations of sexual harassment and inappropriate touching emerged stretching back over the course of years.

His wife and artistic director, Gladisa Guadalupe, was just fired after the investigation by the law firm Jones Day uncovered a culture of intimidation and retribution that aimed to obstruct the investigation and a wide range of issues related to financial impropriety and self-dealing.

From the Jones Day report:

-Description by Ms. Guadalupe of complaining dancers as “moles” or “troublemakers” and stating that once the investigation was over, “we will handle the troublemakers.”
-Proposal to lay off employees suspected of communicating with news media.
-Altering Nutcracker cast assignments to the detriment of dancers suspected of cooperating with the investigation.
-Dismissing from the Cleveland School of Dance faculty dancers who cooperated with the investigation.

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-Commingling of funds of Ballet and Cleveland School of Dance, which are separate entities.
-Cleveland School of Dance expenses improperly paid by the Ballet.
-Ballet funds used to pay for personal expenses of Mr. Krasnyansky or Ms. Guadalupe, including personal car insurance, travel, meals, and lodging.
-Restricted donations used to pay for current operating expenses rather than the restricted purpose designated by the donor.
-Significant amounts of endowment donations used for current operating expenses but booked as expenses for the 2023 endowment campaign event

To add a degree of insult to injury, when the the interim artistic director who stepped in when Krasnyansky and Guadalupe were suspended in November was accused of plagiarizing the choreography for the Ballet’s Nutcracker production and ultimately stepped down herself.

When thinking about how this situation could have been avoided, you run into the question of balancing micromanagement by the board with the board exercising appropriate oversight. I suspect that on paper, policies and procedures were in place to avoid the misuse of funds, but the culture of intimidation magnified by the top leadership being married may have made staff reluctant or unable to enforce them.

Similarly, it sounds like it would have been difficult to conduct an investigation or even regular check-in conversations with the dancers about their perceptions of the work environment in the face of the pressure to keep quiet that was being brought to bear.

By no means am I excusing what happened. I am just observing that in hindsight, it is easy to say the board should have been paying more attention. It is difficult to identify what measures they could have put in place which would have provided them with accurate, honest reporting about the state of the the organization given the effort of obfuscate. The Jones Day report said despite all they discovered, they had repeatedly been denied access to most of the materials and records they requested so there are likely other issues which have remained uncovered.