The News Desk is a collection of news, notes and breaking items affecting the Fredericksburg community.
Celebrate Virginia, Stafford storage firm file against slavery museum
BY CHELYEN DAVIS
Celebrate Virginia is asking a Richmond bankruptcy judge to force Doug Wilder’s U.S. National Slavery Museum to liquidate.
And Hilldrup Cos. in Stafford County wants the same judge to force the museum to pay for months of storage of artifacts and office equipment.
The two filings this week are the latest in the saga of former Gov. Wilder’s slavery museum, which filed for bankruptcy last year with debts of about $7 million.
Celebrate Virginia donated the land—38 acres—to the museum a decade ago. It was supposed to house the museum building and gardens, and was subject to a deed restriction that requires the land to be used for an African–American history museum.
But nothing has been built, and now the land is overgrown with weeds and neglected.
In court documents, Celebrate Virginia says the museum has “severely diminished” the property’s value, from about $19 million when donated to $7.6 million today.
Celebrate Virginia says that it donated the land free of liens or other encumbrances, but by now the museum has allowed liens and debts to accumulate. The museum owes Pei Partnership Architects several million dollars and interest continues to accrue, and the museum also owes the city of Fredericksburg about $260,000 in unpaid real-estate taxes.
Under bankruptcy law, a creditor can make a case for converting a bankruptcy from Chapter 11 reorganization, which is what the museum is trying to do, to Chapter 7 liquidation if it can show the debtor’s actions caused “substantial or continuing loss to or diminution of the estate” without a “reasonable likelihood of rehabilitation.” The law also allows for liquidation if there is “gross mismanagement of the estate.”
Celebrate Virginia also notes that the land is the museum’s only real asset, and would be the only source of recovery for creditors.
“As a party in interest with vested rights in the property, Celebrate VA should not be compelled to sit idly by while the debtor allows its most valuable asset to continue to lose value and to deteriorate—conversion or dismissal would solve these problems and force action,” the company argued in court documents.
The museum’s lawyer, Sandra Robinson, has filed a reorganization plan that promises to repay all creditors over several years, based on an expectation that when the museum resumes fundraising, it can raise more than $900,000 a year.
But the museum went into debt in the first place because fundraising dried up, dropping to just about $45,000 in 2008, down from a 2005 high of $940,000. Its director left in 2008 and since then, the museum has essentially been inactive.
Two weeks ago, Jeffrey Scharf of Taxing Authority Consulting Services, who is representing the city in the case, filed documents objecting to the museum’s reorganization plan. He argued that it is not feasible and expressed doubts about the museum’s ability to raise enough money to operate and repay creditors.
Early in the case, Scharf had suggested moving the case to Chapter 7, but he withdrew that to let the museum try to reorganize.
Hilldrup, a moving and storage company in Stafford, also filed documents in court this week, seeking repayment for months of unpaid storage. According to those documents, Hilldrup agreed to reduce its storage fees for the museum back in 2004, and in that year the museum began storing artifacts and office equipment in a storage unit in Stafford.
The Hilldrup filing doesn’t specifically identify what is stored, but it might answer the question of what happened to historical artifacts that were donated to the museum for display.
Several people who donated items—including Suffolk resident Therbia Parker Sr., who provided slavery artifacts that he estimated were worth about $75,000—have questioned what has happened to those artifacts. Parker has tried to get Wilder to answer that question, with little success.
If the museum doesn’t come into being, the terms of Parker’s gift state that the artifacts go back to him.
The museum stored five pallets of items at Hilldrup’s facility. Since the museum filed for bankruptcy last year, Hilldrup has tried several times to get the museum to work out a payment arrangement or remove its items.
In January, according to the documents, two pallets of unspecified items were removed and taken to the L. Douglas Wilder Library. The documents don’t specify where that is, but there is an L. Douglas Wilder Library and Learning Resource Center at Virginia Union University in Richmond.
Between months of unpaid storage, and the costs to move some items to the library, Hilldrup is owed $1,770 since the museum filed bankruptcy. The company wants the court to compel the museum to remove its items and pay the debt, so it can rent the storage unit to another customer.
The filings from Hilldrup and from Celebrate Virginia will be taken up by Judge Douglas O. Tice Jr. at the museum’s next scheduled bankruptcy hearing June 27 in Richmond.
Chelyen Davis: 540/368-5028