RICHMOND, Va. — An attorney representing former Gov. L. Douglas Wilder and his debt-ridden U.S. National Slavery Museum denies a creditor’s claim that $1.6 million in museum funds are unaccounted for.
In a filing this week in U.S. Bankruptcy Court, attorney Sandra R. Robinson responded to the city of Frederickburg’s request that the judge overseeing the case appoint an examiner to investigate the apparent financial discrepancy.
U.S. Bankruptcy Judge Douglas O. Tice has scheduled a hearing for Wednesday to consider that request. Robinson, who failed to show at a hearing in December, is seeking to postpone next week’s hearing because Wilder is scheduled to be out of state on a speaking engagement.
The museum envisioned by Wilder filed for Chapter 11 bankruptcy protection last September in hopes of reorganizing more than $7 million in debt. The museum was to be built on 38 acres along the Rappahannock River in Fredericksburg.
The museum was scheduled to open by 2004 but was never able to raise sufficient funds, despite a board that includes entertainer Bill Cosby and other prominent African-Americans. No work on the site has been done since 2007.
Robinson said the museum is “in the process of resuming operations” using volunteers until it can emerge from bankruptcy protection and hire an executive director to oversee fundraising and other activities.
Robinson said there is no need to appoint a trustee or examiner. She said the museum has hired an accountant to review its financial records and assist creditors.
“Further, the city of Frederickburg’s motion cites no cause nor does it make allegations of fraud, dishonesty, or gross mismanagement of the affairs of the museum by current management,” Robinson wrote.
The unaccounted for funds involve cash donations reflected in the nonprofit museum’s 2005 federal tax form.
Robinson states in her filing that the $1.6 million went toward “various fixed assets.”
“Consequently,” she wrote, “once the museum’s tax return has been reconciled – properly – there is no cash discrepancy.”
An attorney representing the city of Fredericksburg, which is seeking real estate taxes totaling $250,000 to $300,000, said Friday he still wants an independent examination of the tax return, despite Robinson’s filing that none is needed.
“We want someone to see whether there is an error in completing the return,” said Jeffrey A. Scharf of Taxing Authority Consulting Services. “The numbers didn’t get transferred the right way and I don’t know what caused it but it’s just internally inconsistent.”
Scharf also said the hearing does not require Wilder’s presence.
Scharf filed a response to Robinson, questioning whether the museum could emerge from Chapter 11. The museum has no funds and hasn’t raised any money in four years, he wrote.
“The remote likelihood of reorganization of this debtor, based upon its past history and its post-petition actions, raise serious questions as to the viability of this case,” Scharf wrote.
Wilder, the nation’s first elected black governor and the former mayor of Richmond, envisioned a museum as a center to tell the story of enslaved Americans. It was to include historical artifacts, rare books and documents and an education center.
The museum’s creditors include architects and designers and construction and turf companies that were involved in the planning and site preparation for the museum.
They also include people who donated artifacts that would have been displayed at the museum, such as leg and neck shackles.