Museum's bankruptcy filing raises some cause for concern

Filing for bankruptcy was the logical course of action for the Michael King Smith Foundation, in order to avoid a sheriff’s foreclosure auction on the courthouse steps.

But it was hardly a predetermined course. The foundation had plenty of time to negotiate a deal with Hoffman Construction, the creditor forcing the action, thus avoiding the auction without having to rely on bankruptcy protection.

With murmurs of a deal being virtually in hand, we are left wondering what, exactly, went awry. A statement by foundation trustee Lisa Anderson, included in last week’s news story, served to fuel further curiosity and raise concern.

“The proposed sales contemplate certain agreements with the museum’s board of directors,” she advised the court in the bankruptcy filing. “The foundation was unable to obtain the necessary agreements from the museum’s board of directors before the scheduled sale date.”

Unable to secure agreement from the museum’s board in moves critical to the museum’s future? What’s with that?

During the course of the museum’s longstanding financial woes, we have watched the foundation make a concerted effort to better engage the community. The foundation recognized its isolation and reached out to local leaders and agencies to help foster support for what is clearly an incredible community asset.

Sadly, the museum board did not follow suit. It’s lone engagement was a clumsy, ill-conceived and ultimately unsuccessful effort to persuade the city to eliminate property taxes on the museum water park. That hardly qualifies as a communal meeting of minds.

The lead creditor’s role appears equally puzzling.

The remaining debt to Hoffman was $1.9 million and interest and fees have since swelled it to $2.25 million. That’s a significant sum, but pales into virtual insignificance in comparison to the $150 million Hoffman has reaped on museum construction since 2006.

It’s been two years since Hoffman won court authority to auction the space museum and water park facilities in order to recoup the money it is owed. It twice granted delays allowing more time for settlement talks, but forced the museum’s hand when a possible deal seemed tantalyzingly close.

An array of potential White Knight investors have been approached. The foundation hasn’t yet been able to close a deal with any, and we’d hate to think that’s because the board is standing in the way.

Perhaps we’re giving the foundation more credit it merits. But it is the only party that’s opened itself to public dialog, which leaves us wondering what the museum board could possibly be thinking.