Two Options for Theater: Bankruptcy or Closing : Drama: Trustees of the financially strapped LATC are still awaiting last-minute fund-raising appeals.

Trustees of the financially battered Los Angeles Theatre Center on Thursday were faced with the option of seeking the protection of bankruptcy court or simply closing the curtain for the last time this weekend, sources said.

The critically acclaimed theater is broke, unable to meet its payroll and is several hundred thousand dollars in debt, LATC officials disclosed at a meeting with supporters.

The trustees had scheduled a meeting Thursday night to discuss their options. If the board is unable to reach a decision on either proposal, the center will likely be forced into an involuntary bankruptcy by its employees, who have gone unpaid for the past week, according to sources who participated in discussions with management about contingency plans.

The board’s decision may hinge on the outcome of some last-minute fund-raising appeals.

LATC artistic director Bill Bushnell was scheduled to meet with Community Redevelopment Agency officials Thursday afternoon, but CRA chairman Jim Wood canceled the meeting until there is a clear message sent from the board of directors.

“We’re assessing (the meeting) and its implication for the LATC,” Wood said.

CRA officials previously said they were reluctant to add any more funds to the $27 million the agency has already invested in the theater group since 1982.

LATC officials were also attempting to persuade Arco to release a $200,000 grant six months early, sources said. Arco spokesman Al Greenstein said: “The company has no intention of doing that. . . . Arco has already given the LATC$800,000 in the last four years. Others must make their fair share of contributions.”

The infusion of several hundred thousand dollars would give the theater center enough working capital to attempt a reorganization under the protection from creditors afforded by the bankruptcy court.

Without additional cash, it is unlikely that the group could successfully emerge from bankruptcy, according to sources who attended a meeting Wednesday of about 25 theater center officials and supporters.

Under the reorganization proposal being put to the board, the LATC would bring in a new general manager to overhaul the business and financial side of the operation, leaving Bushnell--the founder and driving force behind the theater group--in a more limited role.

When facing a similar financial crisis two years ago, trustees also sought to bring in a business manager. In early 1990, Robert Lear was hired as managing director. But Bushnell continued to effectively run the business and artistic sides of the operation, according to trustees. Lear left the LATC earlier this year and was not replaced.

Despite the dire conditions, Bushnell was busy much of the week auditioning actors for a new production, according to an aide. He was not available Thursday for comment.

Earlier this week, in a memo distributed to a select group of about 60 supporters, Bushnell wrote, “We are out of cash.” At management’s request, many of the full-time staff agreed to work without pay through Friday with no guarantee that they would receive back pay, according to the memo.

In August, a group of directors made a bid to shut the center down, but were overruled by a majority of the board.