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More arguments scheduled in Slavery Museum bankruptcy case

MORE: National Slavery Museum timeline and archives

By Chelyen Davis

Former Gov.  Doug Wilder’s bankrupt slavery museum is due back in court this Wednesday to prove that it can reorganize and pay off its debts.

The Fredericksburg-based U.S. National Slavery Museum has proposed to repay several million dollars in debts by resuming fundraising and by selling off part of its 38 acres at Celebrate Virginia.

The primary creditor, Pei Partnership Architects, is owed more than $5 million and hasn’t objected to the museum’s latest reorganization plan.

But the city of Fredericksburg, owed about $300,000 in back taxes, and Celebrate Virginia both have filed objections to the plan.

Neither one has an official vote on it, as Pei does.

The city and Celebrate Virginia both say that the museum’s reorganization plan doesn’t have enough detail. It doesn’t outline fundraising projections, nor how much operating costs will be. It also doesn’t specify how the museum would plan to sell the land, how much it could get for the land, potential buyers for the land, and how the museum would get around the restrictive covenants on the land that require it to be used only for an African-American history or educational purpose.

Museum attorney Sandra Robinson has said, in past court filings, that she thinks the covenants are unenforceable and she will try to get them removed.

Celebrate Virginia donated the land in the first place, a decade ago, and argues that those covenants are legal and that the museum won’t be able to successfully remove them.

Without proceeds from a land sale, Celebrate Virginia said in filings last week, the math doesn’t work; the museum’s proposed quarterly repayments to Pei and to Fredericksburg are greater than its projected donations of $900,000 in the first year.

Celebrate Virginia said the museum’s fundraising projections are “wholly unsupported by any past or current financial data,” and that donors are unlikely to give money that would first go toward paying off debts rather than building a museum.

“Given the debtor’s history, which in a nutshell consists of raking up millions of dollars in debt with nothing to show for it, it is hard to believe that donors would be willing to donate funds that would be spent to pay off old debts rather than fund the museum’s construction,” Celebrate Virginia said in its objection to the museum’s reorganization plan.

Judge Douglas O. Tice Jr. will hear those arguments on Wednesday and may rule on whether the museum can move forward with reorganization as it has proposed.

 Chelyen Davis:  540/368-5028