The solution to the Pennsylvania Academy of Music's financial woes remains in sight but out of reach.

PAM has had little success collecting the $1.2 million in unpaid pledges made to it by 28 firms, couples and individuals, despite several pleas.

The donors and their unpaid amounts were disclosed by PAM in a filing last month with the U.S. Bankruptcy Court.

PAM officials have tried to nudge their donors several ways.

They've made public statements, had private conversations and written letters, explaining how payments could ease or eliminate its financial plight.

Beyond that, PAM's tactics have depended on whether donors are current with pledge payments or late.

Donors who are late with their pledge payments, often spread over several years, have been threatened with possible lawsuits.

Donors who are current with their payments, but have payments yet to come, have been asked to accelerate those future gifts into the present.

But PAM's attempts at persuasion — especially the letters — seem to have generated more ill will than cash.

PAM has received only $23,500 from four donors since its May bankruptcy, according to the July filing.

That's out of a list that includes well-known businesses, executives and PAM's own founders.

Said a donor who's on track with a multiyear gift and received a PAM letter:

"They tried to strong-arm me — at least I felt that way — into paying the whole balance.

"You give somebody (a large sum), you think you'd get more than a cold letter in the mail. You think they might call," said the irritated benefactor, who requested anonymity.

Dr. Thomas F. Godfrey, PAM's executive director, said PAM opted to send letters that would "state (the situation) plainly, not dance around the issue."

"We did it the best we could. We're not experienced in sending out letters like that," he added.

Godfrey said PAM must try to collect the pledges not only because it's almost out of cash, leading it to tap its endowment to pay operating expenses.

PAM also needs to convince a bankruptcy judge that it's doing everything possible to deserve a chance to reorganize and stay open.

"This is something I take zero pleasure in being part of, but my task here is to help the academy survive...," he said.

"We don't want to alienate potential donors. We're going about this in as sensitive a manner as possible.

"I apologize to anyone who's taken offense from the process. That's not our intention. We're just trying to get people to honor what appear to be valid promises to donate," said Godfrey.

Changing times
Many of those promises were made under different circumstances — to support the $32 million building PAM developed, several donors contended.

PAM occupied the lavish 42 N. Prince St. building in June 2008, earning praise for being a catalyst of downtown revitalization.

But PAM's fortunes soon soured.

It lost its deed in December, then lost its lease in May. After using temporary summer quarters, PAM intends to move to Liberty Place.

Former PAM trustee William Regitz, who has $150,000 remaining on a multiyear pledge, said he does not intend to pay that balance.

"The academy didn't live up to its commitment, so I don't need to live up to mine," said Regitz, a retired division general manager from the Intel computer firm.

"I made an investment in an organization that was going to own a building and run a music school there. It wasn't capable of running a music school. It made some very poor choices.

"I don't feel I owe them anything," he said.

The letter Regitz got from PAM only made him more resolute.

"Another bad move by the academy," he said. "Why would you want to give money to somebody who wants to sue you?"

Smucker Co. president Merv Smucker, who has made a pair of $2,000 annual pledge payments on time, said he's undecided whether to pay the remaining $6,000 he pledged.

"I have to talk to my attorney," said Smucker, whose Smoketown firm hung the drywall and installed the metal framing in PAM's former Prince Street building.

"I gave the pledge to help them get in the facility. They're no longer in the facility. They're in bankruptcy."

Two other donors miffed by PAM's changing circumstances are Alan Wyand and Robert Shoener, retired music educators and past winners of PAM's "Volunteer of the Year" award.

"We were very involved in the academy. We believed very strongly in its mission. But what has happened in the past year has soured us...," said Wyand.

"We feel at this point we want nothing to do with the current situation," he added, saying he and Shoener will not make the remaining payments on their five-year pledge.

Though PAM lists Wyand and Shoener as having $20,000 unpaid on their $25,000 pledge, Wyand disputed that, saying the unpaid amount is $10,000.

Also stopping payment on their pledge are John M. Buckwalter, chairman of Lancaster Newspapers Inc., publisher of this newspaper, and his wife.

After paying $7,800 of their $10,000, multiyear pledge, they ceased making payments when PAM filed for bankruptcy.

Asked whether they would pay the remaining $2,200, Buckwalter said, "Right now, we're waiting to see what develops."

Perhaps the most prominent people with unpaid pledges are PAM founders Frances Veri and Michael Jamanis, who resigned in March.

The PAM filing says Veri and Jamanis have an unpaid pledge of $9,000. They did not return calls for comment.

$500,000 Question
The mother lode of unpaid pledges —$500,000 — is tied to Robert M. Lauman, retired D&E Communications chief operating officer.

Lauman, another former PAM trustee, has an unpaid pledge of $250,000 in his name, according to the PAM filing.

He also is shown on the filing as representing the estate of the late Anne Brossman Sweigart, once D&E's chairman and president.

The estate has a $250,000 unpaid pledge, too.

Lauman referred questions about the pledges to attorney Stephen R. Gibble, who did not return repeated calls for comment.

Some donors listed in the PAM filing dispute that they owe the academy anything.

That's the case with philanthropists Judy Ware and her husband, Paul, a former PAM board chairman.

The Wares, listed as having a $250,000 unpaid pledge, already gave millions to PAM and guaranteed millions of dollars in loans to PAM.

Paying those guarantees was part of a complex fiscal restructuring of PAM last December that erased PAM's debt at the time and temporarily kept PAM out of bankruptcy.

The restructuring agreement also erased the Wares' pledge, said Wares' attorney Dan Blakinger.

"All possible claims" between PAM and its loan guarantors, including the Wares' Ferree Foundation and the Wares personally, were eliminated in that agreement, he explained.

"And it wasn't a one-way street," noted Blakinger, saying the guarantor organizations and the individuals with the organizations dropped all possible claims against the academy as well.

"We settled all claims both ways. Nobody owes anybody anything. This was all dealt with in December," he said.

"Maybe they (PAM) don't like the settlement and wish the prior board hadn't entered into it, but they did. Maybe they think the release is somehow unenforceable, but that's dreaming," said Blakinger.

Dorothy L. Lyet, wife of the late retired Sperry chairman J. Paul Lyet II, likewise took issue with PAM listing her as having an unpaid pledge.

She said she never promised the $98,000 gift that the PAM filing shows.

"They have me down as owing them. Wrong, wrong, wrong," said Lyet, adding that she only promised "to think about" a pledge.

PAM attorney Jacques H. Geisenberger Jr. said PAM has not decided whether to file suit to collect pledge payments that it deems late.

One pair of donors who have decided to enthusiastically support PAM is Roger W. Sandt, chief executive officer of Sandt Products, and his wife.

Sandt promised to start making good on the unpaid $70,000 of their $100,000 multiyear pledge by sending PAM $10,000.

He also joined the PAM board and is helping it do fundraising.

Sandt dismissed the argument that PAM's change in address justifies a change in donations.

"You don't teach a building how to play music. You teach kids," he said.

The executive voiced optimism that "money won't be hard to get" once donors realize PAM has devised a new, solid business plan and management.

Representatives of several organizations with multiyear pledges promised to keep making scheduled payments, as well.

They included Frey Lutz ($8,000 yet to be paid), Wohlsen Construction Foundation ($3,000), Weaver Masonry ($6,000), and Susquehanna Bancshares ($2,000).

Michael Callahan, president of Benchmark Construction, likewise said he would pay the $20,000 remaining on his multiyear pledge when the installments come due.

But Callahan, whose firm was the general contractor on the Prince Street building, did say he was "disappointed" by the way PAM tried to get donors to accelerate their payments.

He said the academy letter's tone seemed more like a "demand" than a request.

Declining to comment on their unpaid pledges were Fred Bloom ($15,000), president of Bird-in-Hand Farms, and Chuck Fessler, president of J.C. Snavely & Sons (also $15,000).

tmekeel@lnpnews.com