DURING its 30th-anniversary season, Manitoba Theatre for Young People considered bankruptcy as it grappled with severe cash-flow problems and a debt that has ballooned to $2.3 million.
At its annual general meeting Tuesday night, a few dozen people, mostly staff and board members, were told the company has registered a $495,155 operating deficit on its 2011-12 season. Auditor Ken Leslie said, "this organization has a going-concern issue," and could not continue without additional funding.
"MTYP is currently in financial crisis after surviving a number of other brushes with near collapse," stated the financial report tabled at the meeting. "MTYP has reported $2,315,215 of liabilities as at June 30, 2012."
The report went on to state the company’s continued existence is dependent upon its ability to restore positive cash flows and profitable operations.
Outgoing board president Keith Bytheway said during an interview the theatre’s future looked very gloomy last season. Board members left and then-general manager Denise Lysak announced she was leaving to join another theatre in British Columbia, leaving an administrative void.
"There was discussions about insolvency, bankruptcy and certainly we were very close," Bytheway said following the near 90-minute meeting. "Three or four months ago, we were struggling with whether we would continue."
Also announced at the meeting was the formation by government funders of an interim management board to assist MTYP develop a recovery plan. The board will be chaired by Cam Mackie, who will oversee a full organizational assessment.
"Our funders see the value of MTYP and are coming to the table with some help," said Bytheway, who will remain on the board.
After discovering $77,867 was misappropriated, the organization began looking at its internal reporting mechanisms and found it was significantly more in debt than first thought. MTYP has struggled to pay off its home at The Forks since 1999 but it’s never had an operating deficit the size of almost $500,000 before.
"Luckily there were board members who knew insolvency was an option but decided not to go there and fight to the end and that’s what we’re doing," Bytheway said.