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Settlement Reached In Bay City State Theatre Bankruptcy Case
Russ Survance
Fri, 19 Dec 2025 13:12:57 EST
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A legal dispute tied to the 2024 bankruptcy of Bay City's historic State Theatre has been resolved through a settlement approved by the U.S. Bankruptcy Court for the Eastern District of Michigan.
According to recent court filings, former State Theatre Director Michael Bacigalupo must pay $72,000 to the bankruptcy trustee by December. 31t, 2025, while former board members Stephanie Martinez and Mark Delestowicz are jointly responsible for $200,000 due by the same date.
The lawsuit, filed in December 2024, alleged financial mismanagement related to two loans issued in 2020 - $800,000 from the Bay County Growth Alliance and $150,000 from the U.S. Small Business Administration. According to the trustee, those funds were used for improvement projects at Wenonah Park Band Shell, expenses that the City of Bay City was expected to cover.
The financial strain from those loans ultimately led the nonprofit theatre to declare bankruptcy in March 2024. Bacigalupo had previously pleaded guilty to wire fraud in a related federal case earlier in 2025, admitting to misusing funds intended for community arts programming.
The State Theatre, which first opened in 1908 and underwent a major renovation in the early 2000s, remains closed during the reorganization process. Court records indicate the trustee is working to repay outstanding debts and preserve the historic downtown venue for future community use.
