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Slavery museum files for bankruptcy

The U.S. National Slavery Museum has filed for Chapter 11 bankruptcy in the Bankruptcy Court for the Eastern District of Virginia.

The petition was filed yesterday in Richmond.

The museum, headed up by former governor Doug Wilder, has had money problems for several years. The museum owes more than $215,000 in back taxes to the city of Fredericksburg, and last month city officials said they would seek a buyer for land where the museum was supposed to be built in Celebrate Virginia.

The museum hasn’t been able to raise money since 2008, when its registration to solicit charitable contributions in Virginia expired, and no action was taken to renew it.

The bankruptcy petition, signed by Wilder, declares about $3.2 million in debts to nine unsecured creditors. The two largest are more than a million dollars each; the museum owes $1.6 million to Lexington Design and Fabrication from Arleta, California, and $1.5 million to Clark Construction of Bethesda, Md.

The petition also states that there will be no money left to pay the unsecured creditors.

In April of 2010, a New York Court awarded Pei Partnership Architects $5.17 million in a lawsuit against the slavery museum. C.C. Pei, the company’s principal and a son of famous architect I.M. Pei, had designed the museum, although construction has never begun. It’s unclear whether the Pei company has been able to collect any of the debt; neither it nor the city is listed as an unsecured creditor, but both are on a list of addresses attached to the bankruptcy petition.

Chapter 11 is typically used by businesses to reorganize, not liquidate. It’s unclear what the purpose of the bankruptcy is for the slavery museum.

Back in February, Wilder made a post on his blog in which he said he and the museum’s directors “look forward to a return to aggressive fundraising in the near future for what we know must be a leaner project.”

In July, the city sent a letter to Wilder and the museum’s agent, informing them that if the back taxes weren’t paid within a month, the land would be put up for sale. City officials never heard back from Wilder or the agent.

The land was valued at $7.6 million in 2009. The Silver Cos. donated the land — 38 acres — in 2002, and deed restrictions say it can only be used for an African-American heritage museum or for “charitable, educational or public purposes and related uses.” The deed restrictions could be removed, but it would have to be done by the Silver Cos., not the city.

While city officials have begun the process of seeking a buyer, they said it could take up to six months for a sale to be completed. City treasurer G.M. Haney said today that the bankruptcy filing was a surprise, but that it wouldn’t stop the sale of the property for unpaid taxes, only delay it.

That delay would be about 90 days, said Jud Honaker, president of commercial development for the Silver Cos. He thinks the sale could still occur by early next year. He said that the city will still get its back taxes, whose total grows daily due to late fees, but that the bankruptcy could wipe out the amounts owed to other creditors.