University of the Arts files for bankruptcy following sudden closure in June

The University of the Arts filed for Chapter 7 bankruptcy on Sept. 13 following its abrupt closure in June. 

UArts will begin selling its properties in Center City, seeking to pay off bond debt totaling around $46 million, according to The Philadelphia Inquirer. The bankruptcy filing follows reports that negotiations with Temple University for a potential merger would likely not succeed in reaching a deal.

The school's debt secured by real estate totals around $67 million, according to the bankruptcy filing in Delaware. UArts has a large real estate portfolio, including several historical properties along South Broad Street.

On May 31, UArts Board Chair Judson Aaron and President Kerry Walk gave the UArts community one week’s notice that the school would be closing permanently after nearly 150 years of operation. The university cited financial difficulties from low enrollment and increased expenses as the main cause.

The sudden closure set off turmoil within the Philadelphia education community, marked by UArts student and faculty protests outside of the building and Walk's resignation from her position. 

Within days of the announcement, Temple University announced that it was exploring a potential merger with UArts in order to maintain the institution. The deal would have transferred a portion of the UArts endowment, which comes from The Hamilton Family Charitable Trust Fund, to Temple. 

However, in August, the Inquirer reported that the merger negotiations were unlikely to reach a resolution, citing objections by the trust over the use of the endowment. 

The UArts website lists over 20 institutions offering support to students in the form of teach-out programs, including Temple. Penn, which did not publicly offer support immediately following the closure announcement, does not appear on the list.