Even as negotiations continue between the museum and owners of its bond debt, the principal owners of that debt say they will begin selling some of the museum's assets, including its exhibits.
The move on collateral is detailed in a
The museum's debt stems from its 2008 move into, and renovation of,
Now, the trustee intends to sell furnishings, equipment, and exhibits, as well as the museum's accounts and gross receipts, revenues, payments, income, and other funds received by it or on its behalf, wrote lawyer
Not so fast, the museum says. The list of items is much larger than "the actual collateral upon which the trustee has a lien," wrote museum lawyer
Both sides agree that some items on loan are not at risk: the restored 1924 Dentzel Carousel owned by the
It is not clear how much money a miniature
The Please Touch houses substantial collections that represent what it meant to be a child in the
It also is unclear whether the sale of exhibits would hinder the museum's operation.
"We will not answer questions on anything other than the fact that there is a [proposed] settlement out there and we are awaiting a response," said Santamour, a bankruptcy lawyer with Stradly Ronon Stevens & Young. On
The stated intention to conduct a private sale of assets came two days before the museum tendered its proposed resolution to owners of the bond debt. The
Payments would be equal to one-third of any adjusted change in the museum's net assets or total museum revenue as reflected on its annual financial statement, whichever is less. The proposed deal also calls for bondholders to be paid the balances in certain accounts that were set aside for debt service.
The deal would require the approval of bondholders representing 67 percent of the principal amount of the outstanding bonds. Messages left for Bloom, the lawyer representing the trustee, were not returned.
A week ago, Standard & Poor's lowered its long-term rating of Please Touch bonds from CC to D after events culminated in the trustee's demanding the immediate payment of principal of all bonds outstanding. "We don't expect them to be able to pay it because of a lack of resources," S&P analyst
Last September the museum decided to forgo a
McMaster said then that she expected a deal by the end of 2013. Last week she said: "There have been some delays, mostly with some of the work we had to do to provide documentation, and conversations and meetings. This has taken longer than we anticipated."
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