Director at center of nudity storm returns to besieged Boston Children’s Theatre

Burgess Clark, center, seen in a rehearsal for “One Flew Over the Cuckoo’s Nest,” will return to his post as executive artistic director of Boston Children’s Theatre. Kayana Szymczak for The Boston Globe

The embattled Boston Children’s Theatre has reinstated its artistic director, and striking staff have returned to work, but two more trustees have resigned as the company grapples with its biggest crisis in many years.

Burgess Clark, at the center of a raging controversy over nudity in a production of “One Flew Over the Cuckoo’s Nest,’’ has agreed to return as executive artistic director, theater representatives said Wednesday.

But the upheaval isn’t over. The financially struggling company is postponing its annual fund-raising gala, which was originally scheduled for May 16, until fall, executive director and producer Toby Schine told the Globe.

“Obviously, with this issue, we haven’t had the staff to do it well,’’ he said. The gala accounts for 10 to 12 percent of the theater’s annual revenues, according to Schine.

A total of three board members have stepped down since Saturday, including chairman Hank Miller, who abruptly announced his departure at an emergency board meeting Monday. Neither Clark nor any of the directors who resigned responded to Globe requests for comment.

The organization will “begin the healing process,” Schine said, by formally returning Clark to his post. “The board wants him back as artistic director. We’re going to move forward.’’

In the future, he said, the artistic side of the operation would communicate more with the board on a matter as explosive as onstage nudity. “We could’ve done it a lot better,’’ Schine said.

The crisis has arisen in a year when Boston Children’s Theatre seemed poised to turn the corner financially, while also expanding its artistic offerings.

Student enrollment in the theater’s programs is on the rise, show attendance has doubled in a year to 23,500, and ticket sales of $370,000 so far this fiscal year — even before “Cuckoo’s Nest” — are on track for a record, Schine said. But beneath those numbers lies a more fragile reality for the 66-year-old organization: late financial filings, slow payments to musicians and other freelancers, red ink that has flowed for years, and a heavy debt load, including a loan to the company from Clark himself.

The financial troubles predate Schine, 38, who arrived at Boston Children’s Theatre in 2009, when the organization was headquartered in a leaky basement office in the South End, its summer enrollment having skidded almost to zero. In the fiscal year ending September 2010, total revenue was $318,694, according to the theater’s public tax filings.

For many years the company has been relying on tens of thousands of dollars in loans from board members and executives to fund general operations, according to a Globe review of its tax filings. Some loans have been on the books for years, at times at relatively high interest rates.

Even Clark, the popular artistic director, loaned $16,000 to the theater in 2009 — a sum that was only repaid last year.

In collaboration with Schine, Clark has pushed the theater in venturesome directions, building a pre-professional training program for teenage actors called New England TheatreWorks.

It also has staged plays that tackle grittier subject matter, including “Cuckoo’s Nest’’ and earlier productions of “Spring Awakening,’’ “The Diary of Anne Frank,’’ and “Reflections of a Rock Lobster,” Clark’s adaptation of a memoir about a gay student’s legal fight to bring a male date to his prom in Rhode Island.

The bitter internal divisions, which exploded into public view last Friday, arose a few days before “Cuckoo’s Nest’’ completed its run on April 29. Nicole Gakidis and fellow board member Peggy Barresi demanded that the brief nude scene be cut, according to Clark. Barresi resigned from the board on Saturday, and Gakidis followed suit on Tuesday night.

Clark refused to alter the production. He viewed the nude scene — in which the main character, Randle McMurphy, played by a 21-year-old actor, drops a towel from around his waist to the floor as an act of rebellion against tyrannical Nurse Ratched — as integral to the play. Angered by what he called an attempt at censorship, Clark decided to resign from the post he has held since 2008.

Schine persuaded Clark to instead accept being laid off, in what Clark has described to the Globe as a way to forestall his resignation while Schine worked to forge a consensus on the board. Schine said the theater has received hundreds of phone calls, most of them supporting Clark. He said he still backs Clark’s decision to incorporate nudity.

“It was an artistic choice that Burgess felt was organic to the production, that heightened the stakes of the show,’’ Schine said.

On Wednesday, the theater’s staff returned to work after their four-day strike. In an interview, staffer Nicole O’Brien, who oversees the administration of the theater’s summer training program for young actors, said that the resignation of Gakidis, a driving force in the dispute over the nudity, “puts this behind us, so that we can move on.’’

Schine acknowledged the recent history of financial trouble and said the company launched a five-year plan to overhaul its finances last year. It took out loans of $146,000 to repay debts, including those to board members and executives, according to a financial report.

Schine said the company has ended the practice of taking loans from the board. “We are not yet, I would say, a well-capitalized organization,’’ Schine said. “But we are moving in that direction.’’

Schine conceded that the company had been slow to pay freelancers in the past but said it had improved over the past year.

Does that mean it is paying freelancers on time? “We are able to do that now,” he said.

The theater has fallen behind in its tax filings, according to the attorney general’s office. The latest available is for fiscal year 2014.

At the Globe’s request, the company provided preliminary results for fiscal 2015, during which the theater reported $775,064 in revenue. It had a loss of $21,000 and liabilities that exceeded its assets by $176,463, including a cash overdraft of $30,000.

The company faces a number of challenges going forward, including the lack of its own space, which Schine described as a rarity among children’s theaters nationally.

Still, he voiced optimism that the worst is behind Boston Children’s Theatre. Putting off the gala was painful but necessary, he said: “We want the night to be a big success.’’