nyone interested in one day running a business, especially during troubled financial times, can glean lessons from the problems currently facing The Gillioz Theatre in downtown Springfield.

The 80-plus-years-old facility reopened in 2006 thanks to a $10 million renovation project initiated by the Springfield Landmarks Preservation Trust (SLPT), a moment many in the community eagerly awaited. Unfortunately, a string of setbacks put the Gillioz on the track to its current fiscal state of bankruptcy and possible foreclosure.

The story caught the public’s attention in December, when the SLPT announced in the press its “Save the Gillioz” fundraising campaign, just days after Guaranty Bank informed the trust that the Gillioz Theatre and the Netters Building would be foreclosed and put up for sale Dec. 31 on the steps of the Green County Courthouse. SLPT owes the bank approximately $3.5 million.

Aside from the generally poor business climate the last three years that hampered the theater’s ability to book events, the SLPT got disappointing news last fall when the Missouri Dep’t. of Economic Development denied the Gillioz’s application for state historic tax credits.

“It was the loss of more than $1 million in actual funds to be paid back to the partnership—toward the retirement of the debt,” SLPT Board President Dave Roling told the Springfield Business Journal (SBJ).

SLPT attempted more than once to negotiate a repayment plan with Guaranty Bank, but trust directors told the Springfield News-Leader that the bank didn’t seem to want to cooperate.

“The bank has rejected our offer, and counteroffered with even a higher figure than has been given all along, which is extremely disappointing,” Roling told the News-Leader.

Parkview business teacher Leslie Callison explained what bankruptcy is and how businesses (and people) reach that low financial state.

“You simply have gotten yourself into so much debt, there’s now way out,” Callison said. “So you basically declare yourself penniless—even worse than that.”

According to the SBJ, the SLPT was about 900 calendar days behind schedule on its loan to Guaranty Bank.

A foreclosure is when the bank takes back the property from the borrower because the borrower failed to honor the terms of the loan agreement.

By declaring bankruptcy, a business (or individual) goes to court and asks the federal government to make its lenders back off for a while so it can reorganize its finances, negotiate new payment terms and, hopefully, find a way to repay what it owes.

SLPT filed for bankruptcy Dec. 30 in federal court, just one day before the bank could foreclose. Now the Gillioz has until April 29 to submit its reorganization plan to the bankruptcy judge.

The outcome of judge’s ruling could be interesting. The Gillioz operated at a loss each of its first four years, which doesn’t help its case.

However, according to Roling, in 2010 the Gillioz finally recorded its first profitable year.

“We are in the black for the first time in our history,” Rolling told SBJ, “more than doubling our revenue in 2010 over 2009. We cut expenses dramatically, and we’ve established credibility.”

Callison said the good financial news could help convince the judge that the Gillioz deserves more time from its bank to repay the loan.

“Showing profit now should help, but the court would still have to balance that with the overall level of debt,” Callison said. “This is why you don’t buy things on credit. You pay with cash for things.”

After all, Guaranty Bank is a business too, and businesses can’t survive when its customers don’t pay what they owe.

So for now, the Gillioz remains open. The theater boasts some big-name acts in the coming months, including famous comedians Ralfie May and Gabriel Iglesias performing in February.

The question is what will the judge say after April 29?