The city of Fredericksburg is asking a federal bankruptcy judge to appoint an examiner to investigate what it says are $1.6 million in unaccounted-for funds of former Gov. L. Douglas Wilder's slavery museum.
A motion filed this month as part of the United States National Slavery Museum bankruptcy case cites an "unexplained change" in cash donations from the nonprofit museum's federal tax form for 2005.
Based on its beginning cash balance, donations and expenses, the museum should have reported a year-end balance of $1.9 million but instead showed $315,865, according to a filing by Jeffrey A. Scharf of Taxing Authority Consulting Services.
The company is representing the Fredericksburg treasurer's office, which is seeking payment of more than $215,000 in delinquent taxes on 38 acres of land owned by the museum.
"This significant sum which is not accounted for in the debtor's books or records or in its federal tax filings raise significant questions about the financial position and management of the debtor," according to the motion, filed Dec. 5.
The motion also notes that the museum has not filed a federal tax form since 2007.
Wilder, who is chairman of the museum, and his attorney, Sandra R. Robinson, did not respond to messages left Tuesday with their offices. Neither appeared at a status hearing that was set for earlier in the day in the U.S. Bankruptcy Court in Richmond.
Judge Douglas O. Tice Jr. continued the hearing until Jan. 18 and said he would issue a show-cause order to get an explanation for the attorney's absence.
A hearing had already been set for Jan. 18 to consider Scharf's motion to either have an examiner appointed to review the museum's finances or to have the case converted to a Chapter 7 liquidation.
The museum filed for Chapter 11 bankruptcy protection in September.
It has reported $7.2 million in liabilities and $7.6 million in assets — essentially nothing more than the donated land. The museum has been planned but never built, except for a small garden that's now overgrown with vegetation.
Wilder, a former mayor of Richmond who teaches at Virginia Commonwealth University, has long avoided questions about the museum, but he insisted in a February post on his website that it would be built, albeit in scaled-back fashion.
In his motion, Scharf says the museum appears unlikely to be able to reorganize because its only asset is the donated property, and it appears to be taking no steps to fulfill its mission.
The museum "has no funds available, has no ongoing operations and has not taken any actions to resume its fundraising activities" by renewing filings with the Virginia Office of Consumer Affairs, the motion says.
On its federal 990 tax form for 2005, the museum reported a beginning cash balance of nearly $1.6 million, as well as donations of $938,186 and expenses of $603,897.
But instead of showing a year-end cash balance of $1.9 million, the museum reported a total of $315,865, leaving $1.6 million unaccounted for, according to the filing.
The museum's "questionable accounting for its assets and revenues" was brought up during a meeting of creditors, according to the filing, but the museum "was unable to explain this discrepancy and no explanation has been made since."
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