McNally Smith College of Music’s bankruptcy estate will generate about $1 million from its sale, which will be distributed to creditors after the completion of the sale its downtown St Paul Structure and equipment.
Last week, the auction of the amplifiers, recording equipment, musical instruments, and the likes lasted for three days and generated about $909,175 as indicated by the preliminary report provided to the bankruptcy trustee.
Segaul Law is a Bankruptcy Attorney in Fort Lauderdale.
About $60,000 have been previously received by the estate on items sold from the auditorium, cafeteria, and college.
The college migrated from Minneapolis to St Paul in 2001 and later closed after many years of refusing new admissions and unsuccessful attempts of converting the non-profit establishment. Over 20 agitated creditors, which comprise students who have their spring tuition ready as well as employees who never got their paychecks have filed a lawsuit that amounts to $6.68 million. But according to the bankruptcy law, unpaid employees are given more priority than creditors.
A few of the proceeds from the sale will be utilized as charges for those organizing the bankruptcy auctions.
It is remaining to see if the insurance provider of the college will offer payment to those handling the auction and the bankruptcy file
It is still inconclusive if the attorney charges will increase due to the pool of money accessible to creditors.
Selling the structure situated at 19E Exchange St. will clear all the secured debts, the mortgages, some mechanics’ liens, and Small Business Administration loan.
Exchange Street Partners, comprising of a group of investors that purchased a $4.5 million mortgage from Bremer Bank at a discount is currently the buyer.
Patti Sullivan, who is the bankruptcy and investor’s trustee brokered the instant purchase that will guarantee the payment of unsecured creditors without the need for a foreclosure procedure.
During the urging of the US Bankruptcy, Sullivan and Judge Katherine Constantine reconnected with potential buyers but the investor’s offer was not matched by any of them.
The attorney for Exchange Street Partners, Dan Beck refused to provide a comment on the investor’s plan for the structure.
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The lease of the only tenant in the structure, The History Theater would be expiring next week. Karen Mueller, the General Manager refused to return the phone call placed on Monday. However, she indicated recently that they are working to extend the lease and might remain in that space in the coming year.