News

Theater’s liquidation of trust fund in question

Funds missing since September; Overture continues operation

The Overture Center is seeking answers regarding the placement of millions of dollars that disappeared during the liquidation of the theatre’s trust fund.

Several million dollars went missing during the selling of the Overture’s assets and handling of the liquidation, according to Ald. Mike Verveer, Dist. 4 and member of the Madison Cultural Arts District.

“There are many questions that all of us have as to how the liquidation was done, and we’re still awaiting concrete, specific, verifiable numbers from the three banks, JP Morgan Chase, the US Bank, and M&I Bank, that provided the construction loan,” Verveer said.

In 1998, philanthropist W. Jerome Frautschi offered a $205 million grant to fund the construction of the Overture Center. Of that grant, $105 million was placed into a trust fund managed by MCAD and overseen by Support Organization for the Madison Cultural Arts District. The trust fund was created with the intention of earning enough profit to pay back the construction debt of the Overture Center.

When the value of the fund fell below $93 million, the banks handling the trust fund forced the liquidation of the Overture’s various securities, stocks, bonds and mutual funds and took the cash to pay off the construction loan.

The trust fund, which was managed by the SOMCAD, a private organization, began selling off its assets at the end of September, finishing sometime in October.

However, the members of SOMCAD are awaiting specific information from the banks that liquidated the trust fund to account for all the money lost.

Verveer added poor accounting might have contributed to the management of the money dealing with the Overture’s construction debt.

Rob Chappell, spokesperson for the Overture Center, said the center has been operating without a trust fund since September.

Although SOMCAD and MCAD are seeking an explanation regarding the handling of the liquidation, Verveer does not think the banks will foreclose the Overture Center.

“I just can’t imagine the banks rushing to foreclose on the property,” Verveer said. “They have a right to, but it’s not an easy, tangible asset to foreclose on.”