JT Exclusive: Baltimore Clayworks Plans to File Chapter 7 Bankruptcy

A classroom at Baltimore Clayworks (Photo by David Stuck)

Baltimore Clayworks, the Mount Washington-based nonprofit ceramic arts center, plans to file for Chapter 7 bankruptcy, which likely means operations will cease, Clayworks officials told the JT Sunday.

The decision came after a coalition called Clayworks Community Campaign, which was founded in February after Clayworks announced plans to sell its properties, declined to give Clayworks the $200,000 it has raised to tackle a debt issue.

A previously struck agreement Clayworks reached with nonprofit Itineris, which assists adults with autism, to sell its two buildings on Smith Avenue for $3.7 million would have wiped the organization of $1.3 million of debt. Itineris pulled out of the deal on July 6, which the JT first reported on Monday.

In an interview with the JT, Clayworks board president Kathryn Holt and interim executive director Devon Powell said Clayworks will move this week to shutter operations because the organization is nearly financially insolvent. Powell said Clayworks has $5,000 in its bank account. The Clayworks board is expected to meet with a bankruptcy attorney in the next few days, at which point Holt added more specifics should start to come into focus.

“I never say never, but in our current venue, it is highly unlikely Clayworks will continue and that this is most likely the end for us,” Holt said. “We were hoping the community group would come through with the support we needed, but what they were offering just wasn’t enough.”

Marsha Smelkinson, a spokeswoman for Clayworks Community Campaign, said on Monday in a prepared statement the Clayworks board “is charged with the responsibility and has the authority to keep” the organization alive.

“We believe that, like any institution, fresh ideas and renewed energy and vision come from a change in leadership,” Smelkinson said. “Fresh leadership is called for, and the larger Clayworks community and Maryland arts community should know that there are vast resources and new leaders ready and eager to get to work.”

As part of a Chapter 7 filing, a trustee is appointed to wind down the business, selling assets to distribute to creditors.

Clayworks officials sent a letter to the Clayworks Community Campaign on Tuesday after attorneys determined the organization was faced with Chapter 7 or Chapter 11 bankruptcy or foreclosure, which the JT first reported on Wednesday.

The letter, obtained by the JT through an anonymous source, outlined a plan that would have allowed Clayworks to reorganize in a Chapter 11 filing had the Clayworks Community Campaign agreed to the board’s terms with no contingencies.

The group would have been required to put up the $200,000 to fund the remaining summer camps and classes and pay staff, artists and teachers and creditors, the letter noted. In addition, Clayworks would have continued its efforts to sell one or both of its buildings to pay off the organization’s mortgages and debt and move to one of the city’s art districts.

A separate donation drive started by Clayworks on the fundraising site Generosity has raised a little more than 10 percent of its $50,000 goal.

Clayworks Community Campaign was initially given a deadline of 5 p.m. on Thursday, but the board moved to extend that to Saturday.

In a last-ditch effort to to negotiate the transfer of the money, a board member met with Clayworks Community Campaign representatives Smelkinson and Sue Patz on Saturday, Powell said. The group agreed to hand over $50,000 by Monday or Tuesday but asked for a deadline of July 31 to consult with its network of pledged contributors to come up with the remaining $150,000. It also asked for representation on the Clayworks board.

“Every time we try and help these people, they undermine our efforts, punch us in the gut and completely try and take us down,” Powell said. “This is one of the latest signs of the behavior that is indicative from this group. This is a really horrible and bad situation for everyone, but if they were really about trying to save Clayworks, they would have given us the money.”

Holt said that she, Powell and the board had spent the last 10 months working on a three-year plan dependent on a sale of the properties to stabilize Clayworks’ finances.

“We had governmental and private grants that were pending the sale,” Holt said. “We were ready to develop new sources of revenue. We were ready to embrace new audiences as well.”

Opposition to the board, which is made up of 12 members, has been heated and continues to intensify.

Holt said Clayworks had planned to open on Monday to allow artists and students to collect their work. But because of alleged threats that have been made against the board and Powell, the buildings will be closed until further notice.

“This has been a very difficult and stressful and fragile time for both parties involved,” Holt said. “Everyone is grieving at this point. It’s just a very sad situation for everyone involved.”

On Friday, police were called to Clayworks after a resident artist started cursing at Powell for changing the locks to the doors, Powell said. Police were again called to the premises on Sunday after Clayworks Community Campaign members and supporters discussed a sit-in attempt.

Det. Jeremy Silbert, a Baltimore police spokesman, told the JT on Monday via email that he “was unable to find any calls for service” from Clayworks.

“Over the weekend and for a few of the days following, we tried to set up a way by which artists and students could pick up their work and personal belongings,” Powell said. “But as has been the case with this entire process, members of the [Clayworks] Community Campaign have created chaos in the face of reasonable, genuine and cogent planning.”

A source who spoke anonymously because of the sensitivities surrounding the situation provided the JT with an email chain between members of the Clayworks Community Campaign making threats against Powell.

“Maybe we should brick up Dev [Powell] in the wood kiln until he comes to his senses … but I guess we would never be able to use it again, then,” a supporter of the Clayworks Community Campaign wrote in an email.

jsilberman@midatlanticmedia.com

This story has been updated.

Leave a Reply

Your email address will not be published. Required fields are marked *