Slavery museum hopes to emerge from bankruptcy able to raise funds again

The U.S. National Slavery Museum is taking steps to reorganize and begin fundraising again, an attorney for the organization told a U.S. bankruptcy court judge Wednesday afternoon, and the judge granted them 30 days to come up with a plan.

The Virginia-based nonprofit, led by former governor L. Douglas Wilder, had hoped to open a museum in Fredericksburg several years ago. But it owes the city hundreds of thousands of dollars in unpaid property taxes, as well as other debts to businesses that helped with planning and design for the project.

A lawyer for the city had asked that the court appoint a trustee or examiner, or to convert the case to a Chapter 7 bankruptcy that would liquidate the organization, because of concerns that progress was not being made. Attorney Jeffrey Scharf pointed to discrepancies in a 2005 tax return, a lack of recent federal tax returns and other issues.

Sandra Robinson, an attorney for the museum, told the judge that the organization could not legally fundraise in Virginia again until it provides more current federal tax returns to the state agency, but that it had hired an accountant and would have those filed within two weeks. It would have a plan for reorganizing within 30 days, she said.

Scharf told the judge that the city was “heartened by the time schedule” and that a new accountant could provide oversight, but he still was skeptical that the museum could, after an apparent four-year lapse in fundraising, raise enough money to pay off its existing creditors, let alone build a museum. The city’s request was continued.

The judge called the proposal “ambitious” but said the museum’s leaders should have the first opportunity to solve the problem.

 
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