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Battle for Circle Lease Takes Few Steps in Place

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The fight over the rights to the defunct Circle In The Square theatre's lease has spun a few more circles. Judge Tina L. Brozman of the U.S. Bankruptcy Court in Manhattan last week rejected a request by the theatre's many creditors for a hearing to require the Circle In The Square school and theatre founder Ted Mann to allow potential bidders on the lease access to the facilities.

The creditors hope to sell the theatre's lease and name to recoup some of the millions the bankrupt theatre owes them--Circle suspended operations last June. Ted Mann and former producing director, Paul Libin, however, contend that their company, Thespian Theater Inc., holds the lease and that the creditors therefore have no claim on the space or its future.

Brozman told the creditors committee--which is made up of the heads and counsel of the pension and welfare trust funds of various theatrical unions--that it was the trustee's responsibility to petition such a hearing. The committee then asked Circle trustee Alan Nisselson to apply for a hearing, which he did on Aug. 7. Nisselson is actually a lame duck trustee, but remains in his office until newly elected trustee Norman Rothstein has been fully appointed. Linda Jamieson, of Phillips, Lytle, Hitchcock, Blain, and Hubert, which represents the creditors, said that some paperwork remains before Rothstein is put through as trustee. She said she hoped he would be approved by Aug. 15. Brozman will most likely not set a date for a hearing until Aug. 20.

"It is critical to preserve Circle in the Square's interest in that space," said Jamieson. The creditors committee sees the theatre's name and 1633 Broadway space as among the few chances they have of getting back any of the estimated $4 million owed them.

Thespian has reportedly held the lease since 1985, but, in 1993, licensed the school to use the space. The school then, in turn, subleased it to the theatre company--a convoluted arrangement which Rothstein has suggested was in contemplation of future bankruptcy. The creditors are now arguing that the unscrupulous misuse of the lease forfeits Thespian's claim to

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