Former bankruptcy judge named conservator at August Wilson Center

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A former U.S. Bankruptcy judge in Pittsburgh will take a stab at rectifying the mounting financial problems at the August Wilson Center for African American Culture, Downtown.

Judith K. Fitzgerald, who retired in May after 26 years on the bench, was appointed Monday to serve as conservator for the center until at least Feb. 3, with broad powers to operate and manage the troubled facility.

Allegheny County Common Pleas Orphans' Court Judge Lawrence O'Toole approved the appointment with the consent of state Attorney General Kathleen Kane, the center and Dollar Bank, which filed to foreclose against the facility in September after it defaulted on its $7 million mortgage.

"I think it's a good choice given the unique set of challenges here," Judge O'Toole said.

Stanley Levine, the center's attorney, portrayed the appointment as a first step in bringing the property back from the financial brink.

He said the goal is to preserve the center, stabilize finances and increase revenues, and restore credibility and confidence so that the local foundations, the Allegheny Regional Asset District and others will be comfortable providing funding.

"That's the ultimate goal of this process and we think it's achievable," he said.

Ms. Fitzgerald, who teaches law at the University of Pittsburgh and Indiana Tech Law School in Fort Wayne, Ind., is expected to start immediately. Her term can be extended beyond Feb. 3 with the agreement of the parties.

She could not be reached for comment, but her attorney, Beverly Weiss Manne, said the former jurist's goal is to "protect this center, preserve its assets, and maximize resources."

"She's looking forward to the challenge," she said.

Under the order, Ms. Fitzgerald will have broad powers to make decisions regarding the center, including those involving shows and other bookings, without interference from the board or managers. She will have the right to hire and fire employees, all the way up to the CEO.

"She's going to have the power to do what she needs to do," Mr. Levine said.

Current board members, he added, are prepared to step aside once the center is back on track to make way for a new board vetted by stakeholders, including foundations, as a way to help restore confidence.

The center, he said, got nearly 70 percent of its funding each year from local foundations, which have cut off funding amid the center's financial troubles. RAD, meanwhile, is holding the center's funding in escrow until the woes are rectified.

"We've been limping along and we recognize that there were some breaches of confidence that other people felt in us," Mr. Levine said.

Dollar Bank has advanced $25,000 to help pay the conservator, whose fee is $350 an hour, reduced from the customary fee of $550 an hour, according to the court order. If additional money isn't available to pay for the conservator's services, the order allows for charges or liens to be placed against the center's assets.

The bank also will make "protective advances" to help maintain the integrity of the property.

Eric Schaffer, the bank's attorney, said Dollar doesn't object to the appointment of a conservator. The bank, however, reserved its right to foreclose if efforts to save the center failed.

"I think the future is uncertain," Mr. Schaffer said.

The Meridian Group, a Downtown financial consultant, will assist Ms. Fitzgerald in her work and will be paid mostly on a deferred basis.

Mark Belko: or 412-263-1262.

Mark Belko: or 412-263-1262. First Published November 18, 2013 3:16 PM

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