Virginia Judge Throws Out Slavery Museum’s Bankruptcy Filing
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Virginia Judge Throws Out Slavery Museum's Bankruptcy Filing

September 4, 2012


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In a move that shocked many observers, a Virginia bankruptcy court recently dismissed the bankruptcy filing of the U.S. National Slavery Museum, at the request of the museum’s own bankruptcy lawyer.

This week, Judge Douglas O. Tice Jr. agreed with the museum attorney’s request for a dismissal of the case and tossed the bankruptcy filing out of court, according to a report from the Richmond Times-Dispatch.

The museum, which had been the pet project of former governor Doug Wilder, has reportedly regained its ability to solicit tax-free donations. Sources say the museum lost this privilege several months ago, which severely curtailed its ability to remain financially afloat.

And the museum immediately reaped the benefits of its new status, as an anonymous donor reportedly promised to pay the museum’s $250,000 tax debt, which is owed to the city of Fredericksburg, Virginia, where the museum was supposed to be built before it hit financial troubles.

In addition, representatives for the museum say that other donations will help the museum pay extra taxes it owes to both the city and the state of Virginia, sources say. The museum may also sell some of the 38 acres it owns to meet the rest of its debts.

The cancellation of the museum’s Chapter 7 bankruptcy filing means that it will be able to keep its prized assets and continue the process of building the museum. The museum, however, won’t be allowed to file for bankruptcy again for another year, so it must be fairly confident that it can repay the bulk of its debts, which may be a difficult task.

While the tax debts are certainly a concern, the museum also owes its largest creditor, Pei Partnership Architects, roughly $5 million. This debt, however, will likely be paid over several years, as the museum plans to reach a restricted payment plan with the architects outside of bankruptcy court.

With its new tax-exempt status, the museum believes that donations will start flowing into its coffers again, although museum officials will have to do plenty of legwork in soliciting donations to make sure their fledgling project stays solvent.

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