National Slavery Museum bankruptcy case dismissed

(AP, ABC7) - The U.S. National Slavery Museum's Chapter 11 bankruptcy case has been dismissed.

The Free Lance-Star says U.S. Bankruptcy Judge Douglas O. Tice Jr. granted the museum's dismissal motion Friday.

Museum board attorney Sandra R. Robinson sought the case's dismissal after Tice ruled earlier this week that Celebrate Virginia could be a party to the case.

Celebrate Virginia donated land in Fredericksburg where the museum is to be built. Celebrate Virginia had filed a motion to convert the case to Chapter 7 or dismiss it.

Robinson's motion said the cost of converting the case to Chapter 7 would substantially reduce the museum estate's value before any creditor is paid.

It cited fees for attorneys, appraisers and auctioneers, along with fees that a new bankruptcy trustee would charge to liquidate the museum's assets.

The motion also noted that Celebrate Virginia is not a creditor.

"Through dismissal, the Debtor has a real chance to reorganize for the best interest of its creditors and its estate: the only entities this Court is statutorily authorized to consider in making its determination," Robinson wrote.

Donors have pledged $100,000 to the museum but the money will not be released while the bankruptcy case is pending, Robinson wrote.

One donor, who was not identified, has agreed to pay the museum's delinquent property taxes but only if the bankruptcy case is dismissed. Coupled with the other pledges, there would be enough money to pay the back taxes plus taxes that have accrued since the bankruptcy filing last September.

"Therefore, the full payment of the City of Fredericksburg debt can be achieved within days of the dismissal versus after months (or a year) in a converted Chapter 7 case - and at no cost or diminution of the Debtor's estate," Robinson wrote.

The museum's largest creditor, Pei Partnership Architects, is owed approximately $5.2 million.

An attorney for the company has said Pei is willing to consider a reorganization plan rather than a liquidation.

Former Gov. L. Douglas Wilder began publicly advocating for the museum a decade ago and began lining up backers and donations. By 2007, however, giving to the proposed museum began to dry up, and construction never began.

Wilder, the grandson of slaves and the nation's first elected black governor, has said he was inspired to create a museum to tell of the nation's lucrative commerce in human enslavement after he visited Africa 20 years ago.

He assembled a board that included distinguished African Americans and enlisted the financial support of entertainer Bill Cosby, but could not sustain fundraising.

Robinson filed for Chapter 11 protection for the museum last September, hoping to keep creditors at bay while she worked on a plan to get the museum back on track.