EXCLUSIVE: A federal bankruptcy judge has approved a reorganization plan for Hal Luftig Co. that gives the busy producer breathing room in his six-year court battle against a deep-pocketed investor.
The litigation involves the 2013 Tony Award-winning musical Kinky Boots, which Luftig produced with Daryl Roth. (Roth isn’t involved in the dispute.) In 2022, an arbitrator found that Luftig and his company breached an agreement with the Reno, Nevada-based investor Warren Trepp regarding proceeds from the blockbuster.
A court awarded Trepp $2.9 million, on top of the $2.7 million he had already earned from his Kinky Boots stake. In response, Hal Luftig Co. filed for bankruptcy protection.
Under the company reorganization that U.S. Bankruptcy Judge John P. Mastando III approved last month, Trepp would be paid a projected $720,000 over five years. That’s just 25 percent of what he was awarded in the arbitration. Trepp is precluded until 2030 from trying to collect from Luftig individually to supplement the Luftig Co. payout.
“We are pleased that the judge ruled in our favor and approved the reorganization plan,” Luftig wrote in an email to Broadway Journal, via a spokesman.
Trepp said in an interview that he’ll appeal the ruling. He argued that it’s unfair to extend the two-year-old “stay” protecting Luftig individually from Trepp’s debt collection for another five years.
“They’re doing whatever it takes to postpone the inevitable,” said Trepp, who was the head high-yield bond trader at the now-defunct investment bank Drexel Burnham Lambert in the 1980s. Now 74 and battling cancer, Trepp said he doesn’t expect to be alive in five years to collect the debt from Luftig individually. “Does my wife need this headache? Absolutely not.”
When adding interest to the award, Trepp estimates he’s owed about $3.5 million. In 2023, Mastando approved a plan that permanently released Luftig individually from Trepp’s claim, a ruling overturned by another judge.
The legal drama has opened a window into the business of Luftig, an entertaining raconteur who decided as a 9-year-old in Suffolk County, Long Island, that he wanted to produce after seeing Broadway shows with his parents. His current projects include Midnight in the Garden of Good and Evil, an adaptation of John Berendt’s 1994 gothic bestseller set in Savannah, Georgia. Scheduled to open later this year at a capitalization of up to $25 million, it would be the first new musical on Broadway in a decade to feature music and lyrics by three-time Tony Award-winner Jason Robert Brown.
Luftig is also working on Becoming Nancy, a long-gestating musical set in the 1970s about a gay teenager coming out and coming of age, which recently had a developmental production at U.K.’s Birmingham Repertory Theatre. The producer said in a January hearing that he’s seeking a West End theater for the show.
Brian Ryniker, a bankruptcy financial consultant hired by Hal Luftig Co., projected that Midnight and Becoming Nancy will generate a profit in 2027, 2028 and 2029 to benefit the reorganization. “Mr. Luftig’s personal relationships in the theatre industry are a large factor in their projected success,” Ryniker wrote in court papers, without referencing commercial theater’s typically high failure rate. (Ryniker didn’t return an email.)
“Mr. Luftig is not just some fundraiser,” Sheryl Giugliano, a bankruptcy lawyer for Hal Luftig Co., said in the hearing. “He is a creative master and fixer. He turns shows around, he generates income-producing projects today.”
Luftig was similarly optimistic discussing potential revivals of musicals he previously produced that could aid the reorganization. In court, he noted a scheduled run of Legally Blonde at the Kennedy Center in June. (The hearing predated President Trump’s takeover of the performing arts complex.) He referenced a reading of Thoroughly Modern Millie — which overcame a Ben Brantley pan to win the Tony for best musical — “with the hopes that it too can be revived on Broadway.”
“There is some talk Legally Blonde would be turned into a motion picture,” Luftig continued at the hearing. “Of course, we are hoping to do that with Becoming Nancy and Midnight in the Garden of Good and Evil.” (Luftig didn’t answer questions for this story. Legally Blonde was a movie before it was a stage musical.)
Luftig and Trepp’s relationship began when Luftig was working at the Orpheum Theatre in the East Village, which Trepp briefly owned. Trepp hired Luftig to find shows to invest in and produce. Trepp paid Luftig a salary and provided capital in exchange for a hefty share of producing income that Luftig generated.
The partnership experienced some lean years before the success of Kinky Boots, which ran for six years on Broadway and is touring again this fall. In October 2014, a year after Kinky Boots had recouped its capitalization and become Luftig’s first long-running blockbuster, the producer terminated their contract. Their friendship also frayed, over questions of credit on their shows, Tony Awards, and money.
Luftig previously dismissed his company bankruptcy as a response to a “contractual dispute arising from a unique relationship with a former business partner that dates back to the earliest days of my producing career.” Regarding the arbitrator’s unfavorable decision, Luftig has said that he relied on his lawyers’ advice about what he owed Trepp, whom he accused of being motivated by vengeance rather than economics.
Luftig has said that he may be forced into personal bankruptcy if Trepp were free to collect money from him personally. According to a June 2023 declaration filed in court, Luftig had minimal assets — relative to the size of the debt — outside of a retirement account, life insurance policy and an apartment and second home that have substantial mortgages.
Luftig also disclosed that his interest in two Broadway shows that he was involved with in 2023 — Here Lies Love and Life of Pi — were assigned to a trust that shields assets from creditors. Neither was a success in New York, although Life of Pi is on tour and “investors will ultimately recoup 100% of their investment,” Luftig said in court papers.
Trepp said that as a creditor, he rightfully expected a share of potential income from Here Lies Love and Life of Pi. He insists that after taking into account the $210,000 he paid Luftig annually for several years, their long association was a money loser for the investor until Kinky Boots. He denies being motivated by vengeance; he said he merely wants what’s due him under his contract with Hal Luftig Co.
Under the reorganization plan, Luftig will be paid $210,000 annually for working half-time for Hal Luftig Co. He also produces via Hal Luftig Productions, which operates outside the bankruptcy.
According to the U.S. Securities and Exchange Commission, Trepp earned as much as $25 million a year working under Michael Milken at Drexel Burnham in the 1980s. Trepp declines to say what difference — if any — a few million dollars would make should he collect the full judgement against the producer.
“Do I have more money than he does?” Trepp asked. “The answer is yes. What does that have to do with the lawsuit? Nothing.”
