Board: 'No embezzlement' at Southern

No money given to the Southern Theater by the McKnight Foundation was used to enrich an individual, according to a communique posted Wednesday on the theater's website.

The Southern and the McKnight, one of its biggest funders, parted ways earlier this month after it was revealed that the theater had used McKnight money intended for individual dancers and choreographers to help with operating costs. Several McKnight fellowship dancers remain unpaid.

The Southern's board posted answers to questions it says had been cropping up since news of the venue's financial crisis.

Here's question #3, followed by the Southern board's entire response:

What happened to the McKnight programming funds?

"It is our belief that no individual personally benefited directly from the borrowing against McKnight programming funds and that no embezzlement of funds occurred. Rather, borrowing funds from the McKnight programming was used to cover overhead and operating expenses of the Theater. An audit of the Southern's books should confirm this. The Board has made the decision to be accountable for the McKnight funds and to accept responsibility for the debt no matter who created it."

Other new revelations in the April 27 web posting:

2) If it fails to raise the $400,000 it said it needed to remain open, the Southern will terminate staff, present three or four 2011-12 shows deemed potentially lucrative, and open the space to others for rental.

3) The McKnight has agreed to work with the Southern on a realistic, long-term repayment plan for the $300,000.

4) The theater has run at a deficit for several years.

5) "Borrowing funds from the McKnight programming to support the operations of the Theater pre-dates the current staff and board. The amount borrowed and owed to McKnight is approximately $300,000 and that amount has not substantially changed for the past three years."

In the past week, the Southern has canceled most of its previously scheduled shows, and has told those with tickets that it is unable to offer refunds.