The Richmond Times-Dispatch has reported that on September 21 a historical national museum, that was founded almost ten years ago but failed to open, has filed for Chapter 11 bankruptcy.
The institution, the U.S. National Slavery Museum, is hoping that the bankruptcy protection will allow them to both regroup and reorganize without being further pressured by creditors.
The museum also hopes to avoid having it's Fredericksburg land sold off.
The bankruptcy is filed in the U.S. Bankruptcy Court of Eastern District of Virginia. The museum claims over $3 million in unsecured debts and no available funds to pay off their creditors.
Allegedly, the largest asset that the museum holds is its land. A 38 acre parcel, that runs along the Rappahannock River in Fredericksburg, has an estimated worth of $7.6 million.
But, the parcel's deed restrictions include that it must be used for the slavery museum or for the museum's associated educational purposes.
In an attempt to collect back taxes, the city has tried to sell the land.
G.M.H., the treasurer, said that the property's tax liability, from 2009 to 2011, is over $215,000.
The tax liability continues to grow.
G.M.H. said that the museum had 30 days in which to pay the bill - with the threat that the city would sell the land - and the bill was left unpaid. In August, the city put the property up for sale.
G.M.H. said, "No one verbally has stepped forward (to buy it)."
Since then the city was notified of the bankruptcy filing. G.M.H. said, "(
Bankruptcy) is a field all to itself.
We're just waiting it out now."
Lawyers that filed the bankruptcy, as well as Fredericksburg's city manager, did not return calls for comment.
Two of the largest creditors are Lexington Design & Fabrication in Los Angeles, California, and Clark Construction in Bethesda, Maryland. Officials for both companies also failed to return calls for comment.
Former Governor L. Douglas Wilder founded the museum. Wilder has been criticized because the museum was originally to be situated in a 2,500 acre complex between Interstate 95 and Route 3 in Richmond in 2002.
When the 38 acres were donated in Fredericksburg, Wilder moved his plans for building the museum there.
The museum was originally slated to open in 2004 but failed to garner the funds needed. By 2007 no new work had been completed on the site.
In 2010 the museum didn't update a filing with the state that would have allowed it to legally solicit donations.
A Suffolk couple, that donated almost 100 items to the museum, have requested their objects returned in February. They state that they had placed a contingency on the gift that if the museum failed to open they would get their collection back.
Wilder, via his own personal blog, was confident that the museum would open.
If you are facing a business or personal bankruptcy contact a bankruptcy attorney for help. It is vital to have a lawyer with bankruptcy experience to protect you and your assets as much as possible.