Pasadena Playhouse files for Chapter 11 bankruptcy protection

The Pasadena Playhouse, a landmark theater that was first opened in 1917, can count itself as yet another victim of the Great Recession. On Tuesday, the venerable theater, located in Pasadena, Calif., filed for Chapter 11 bankruptcy protection.

For theater goers in the area, the news isn't unexpected. The playhouse had shut its doors on February 7, saying it was having some financial problems. It wasn't exaggerating. The theater had no cash, owed $500,000 in bills and couldn't make payments on over $1.5 million in bank loans and debts, the Los Angeles Times reports. More than 35 people were laid off.

Believe it or not, there is a silver lining to this saga. Since the theater filed for Chapter 11 bankruptcy protection (rather than, say, Chapter 7) it intends to come up with a plan to pay its creditors (most likely at a fraction of what it owes), reorganize and eventually reopen. That may not be thrilling news to anyone who is owed money by Pasadena Playhouse, but it's much better than if the theater had filed Chapter 7, under which the creditors would likely not see a dime.