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Creditors: slavery museum should liquidate

A proposed slavery museum sponsored by a former state governor is in deep financial trouble, and administrators for the facility are seeking a Chapter 7 bankruptcy because fundraising efforts have failed.

Located in Fredericksburg, Virginia, just south of Washington, D.C., the museum was designed to tell a comprehensive story about the history of slavery in the United States. Instead, ground has not even been broken on the $19 million plot of land that was donated by Celebrate Virginia. The land has now been assessed at about $7.5 million, but one of the museum's creditors already has a $5.1 million lien on the property. The land amounted to about 38 acres, according to court records.

The museum had initially filed for protection from its lenders in 2011, after a steady flow of donations ceased and the organization lost its tax-exempt status. Although museum leaders say they want to plan an ambitious fundraising campaign to fix their financial woes, the city of Fredericksburg said that route was unlikely to succeed.

Celebrate Virginia is asking the court to change the museum's Chapter 11 bankruptcy to a Chapter 7, so that the land can be unloaded before it faces further devaluation. Chapter 7 bankruptcies involve asset liquidation, whereas Chapter 11 is more of a restructuring effort.

Celebrate Virginia has said that the museum's plan to restructure its finances is vague and unfeasible, according to court records. The museum's administrators had said that they planned to raise nearly $1 million in the first year after bankruptcy, and they anticipated even more in the following years.

In addition to the most recent filing, the museum is facing further bankruptcy claims from the Hilldrup Companies, a storage firm that has been housing office equipment and artifacts for the museum since 2004.

Source: Associated Press, "Debt-ridden slavery museum in Va. hit by more demands; 1 creditor calls for liquidation," June 7, 2012

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