Children's Theatre awaits final sex abuse lawsuits

Jeanne and Steve Bolz are big fans of the Children's Theatre Company, and they take their kids to the Minneapolis theater pretty much every year. Recently they were on their way to see "Diary of a Wimpy Kid: The Musical," and they stopped to talk.

"I like that it's very family-friendly," said Jeanne Bolz. "I like the topics that they choose."

Even so, as a mother, she finds part of the theater's legacy troubling.

"I feel really bad, actually, for CTC and what they're going through," she said. "As a mom, I am highly concerned. I would feel horrible if it touched our family. And I feel horrible for any families that it did touch."

Bolz was referring to accusations of past sexual molestation at the theater. Multiple child abuse lawsuits are pending against the theater, and more are expected this month.

Eight former child actors and technicians say CTC employees sexually abused them as teenagers several decades ago. They've filed suit under the Minnesota Child Victims Act, arguing that the theater should have monitored employee behavior and prevented the alleged acts.

Jeff Anderson, the lawyer representing the plaintiffs, says his firm plans to file at least six more lawsuits against CTC before the act expires May 25.

"I think there's no question that Children's Theatre culture was created and allowed to be tolerated by multiple people for multiple years, where scores of kids were abused in the '70s and '80s," Anderson said.

None of the people named in the suits are employed at CTC today. The theater's former artistic director, John Clark Donahue, pleaded guilty to having sexual contact with three boys, ages 12 to 15, in 1984. Donahue is named in three of the pending civil suits against CTC. So are other former employees.

Anderson said CTC needs to come to terms with this part of its history.

"They have owned the achievements of the past into today," he said. "If they are going to own the achievements of the past that brought them to national prominence, they also have to own the parts that are unworthy of that reputation."

CTC refused multiple interview requests. Instead, the theater company issued a statement, which reads in part:

"Our guiding principles are to have the truth be known and to see justice done for anyone who may have been the victim of sexual abuse. ... At every step, we will always remember that someone in pain, someone who was a member of our community, is at the heart of these matters and that this is an area where we will never say 'enough.'"

The statement fails to address several issues, including the critical question of whether it can afford legal fees and possible payouts to victims.

Jon Pratt, executive director of the Minnesota Council of Nonprofits, has examined CTC's financials. "Overall," he said, "it's a very healthy organization."

CTC hasn't filed a 2015 tax report yet, but according to the nonprofit's filing for the fiscal year ending June 30, 2014, CTC had $12.9 million in revenue and cash reserves of about $628,000. Whether that's a lot of money, Pratt said, "really depends how big the judgments are."

It's unclear how much liability insurance CTC has. Anderson said the theater has insurance to cover incidents alleged to have taken place in the 1970s and 1980s, but the amount of coverage is unclear.

"Insurance coverage is complicated and involves multiple policies and layers of insurance, which takes time to be known," Anderson's firm said in a statement. "These details are never known this early in a case."

Other potential resources include the theater's endowments, which total almost $10 million. Whether that money is available for paying judgments, Pratt said, may depend on how they were given to the theater.

"Is there some flexibility in the handling of endowments? Sometimes this is a question for the courts," Pratt said. "The organization can seek to have some of the restrictions lifted. But it also depends on: What did the donors say when they made the gift?"

Public filings don't reveal the restrictions CTC's donors may have placed on the endowments.

Anderson said he believes CTC has changed its ways, and he doesn't intend to break the organization's bank.

"If I have any reason to think it's not wholesome and safe today, I will call it out," Anderson said. "Right now, I have reason to see it as wholesome and safe. And so I am supportive of what they are doing and how they are doing it. Nor is it our intention to take them down."

Each civil lawsuit asks for a minimum of $50,000 from CTC.

If the financial burden becomes overwhelming, Pratt said, the theater company will have choices to make. "One option — hopefully it never comes to this — but could be bankruptcy."

Editor's note: Todd Melby is a freelance journalist and producer.