January 23, 2022 - VCBS member Eric Riback has made us aware of an update on the status of the Bennington Center for the Arts and the associated Covered Bridge Museum. Jim Therrien with Bennington Banner reported on the update. The full article is republished below with permission.
BENNINGTON - An agreement reached in bankruptcy court could lead to the sale of the former Bennington Center for the Arts for $500,000 back to an entity associated with the founders, Bruce Laumeister and Elizabeth Small.
The center, on 5.8 acres at 44 Gypsy Lane, was donated by the founders in 2017 to the former Southern Vermont College, which subsequently slid into bankruptcy in 2019 and closed that summer. The arts facility includes a 315-seat theater, seven galleries, offices and other spaces. The grounds include a covered bridge museum and gardens.
Since August 2020, dispersal of the Southern Vermont College real estate and other assets has been ongoing during Chapter 7 proceedings in U.S. Bankruptcy Court, and the arts center is the last piece remaining to be dispersed.
A motion filed this week by Raymond Obuchowski, the court-appointed Chapter 7 trustee representing the college’s estate, seeks authorization from the court to sell the arts center and related buildings to the Bennington Center for the Arts Inc.
Attorney Lon McClintock, of Bennington, who represents Laumeister and Small, said Friday that the founders intend to partner with a group of artists and will purchase the property through the Bennington Center for the Arts Inc. nonprofit corporation. Afterward, he said, the group will form another nonprofit entity to operate the facility as an arts center.
The partners are members of the Society of Animal Artists, McClintock said, but the society itself is not involved in the purchase. He said Laumeister and Small hosted shows at the center with work from members of the society, and had “a long association with some of the members.”
The center founders “would like to be supportive of the new organization,” McClintock said.
He also said his clients are thankful for the way Obuchowski has overseen maintenance of the closed arts center since the college shut down, and believe it is apt that a new group seeks “a new direction, with new energy” for the center.
Similar to dispersal of the 371-acre college campus in December 2020, other parties will be allowed to make offers for the property, provided they are approved as viable by Obuchowski and exceed the current offer by at least $25,000.
As of the bankruptcy filing date in 2020, the value of the art center was estimated at $4.2 million. Obuchowski states in his sale motion that prior to expiration of a marketing agreement for the property with TPW Real Estate on Dec. 31, “no viable offers were received by the trustee.”
Obuchowski added that prior to the end of the agreement, he had entered negotiations with Bennington Center for the Arts Inc. as a potential buyer.
According to his motion to the court, Obuchowski said “higher or better offers” for the property must come in at a minimum of $525,000, and be “made without any contingencies whatsoever.” They must be submitted to him in writing no later than Feb. 4.
A hearing via Zoom before Judge Colleen Brown in the bankruptcy court is scheduled in the case on Feb. 11.
If an auction is held by the court, subsequent bidding increments must be in the minimum amount of $25,000 each, the trustee wrote.
That format would be similar to a process during an auction before the court in 2020, during which Southwestern Vermont Health Care outbid two other potential buyers to purchase the main college campus and buildings for $4.65 million.
As part of Obuchowski’s motion for approval of a sale, secured creditor Frederic Poses - a prominent supporter of the college who put up $2 million as security for a loan to the college in 2011 to fund campus improvements - and Laumeister and Small, who had filed suit in 2019 against the college to annul their donation of the center, all agreed to an overall settlement to allow the sale.
According to the agreement, if the sale goes through as described, the trustee’s expenses for maintenance of the property and other bankruptcy process costs, totaling and estimated $75,000, will be taken from the sale proceeds.
In addition, a payment to the college estate of 10 percent of the remaining proceeds, estimated at $41,500, will be made, according to the sale motion. Any amounts owed the town of Bennington also would be deducted at the sale.
The remaining proceeds of the sale “shall be paid to the donor group and Frederic Poses in partial satisfaction of its secured claim, subject to the terms of the settlement and compromise between those parties,” Obuchowski wrote.
The closing date under the agreement is to occur within 30 days of any court order approving the sale.
Jim Therrien writes for Vermont News and Media, including the Bennington Banner, Manchester Journal and Brattleboro Reformer. Email email@example.com
Editors note: Our thanks to Eric Riback for bringing this article to our attention in the Vermont's Covered Bridges Facebook group. Thanks also to James Therrien of the Bennington Banner for granting permission to republish his article.