The Country Music Hall of Fame and Museum will get to keep historic instruments from Bill Monroe, Johnny Cash and Mother Maybelle Carter pledged by a man who committed suicide after being accused of defrauding millions from investors.
The settlement between the Country Music Foundation, which operates the museum, and the trustee handling the bankruptcy for Bob McLean was filed Tuesday in bankruptcy court in Nashville. It requires the museum to pay $750,000 to McLean’s bankruptcy estate to help pay back his creditors.
McLean, an investor from Murfreesboro, was accused of swindling victims of more than $67 million in a Ponzi scheme. He committed suicide last year after investors filed an involuntary bankruptcy suit against him.
McLean donated two Johnny Cash guitars to the museum, each valued last year at $125,000, and pledged money that allowed the museum to enter confidential purchase agreements for the other instruments: Monroe’s 1923 Gibson mandolin, once priced at $1.1 million, and Carter’s 1928 Gibson guitar, once priced at $575,000.
As part of the settlement, which is still subject to court approval, the museum will write off the unpaid balance of McClean’s pledges: $870,850.
The agreement comes after more than a year of negotiations with Robert Waldschmidt, the trustee for McClean’s bankruptcy estate.
Waldschmidt had sought to recover about $1.54 million from the museum. As an alternative, he asked the court to order the museum to surrender the instruments so they could be sold to satisfy McLean’s creditors.
But museum director Kyle Young said it did not have the money, and the instruments, like all of its collection, are held in trust for the benefit of the public. The collection does not appear on the museum’s balance sheet and cannot be used as collateral, he said.
“We could not merely turn them over to the trustee,” Young said. Waldschmidt called the settlement a “fair compromise” that will benefit the bankruptcy estate and its creditors while also preserving the museum’s collection.
“Everyone involved in this lawsuit was sensitive to the historical significance of the instruments involved,” he said. “However, the interest of the creditors in this bankruptcy proceeding, many of who lost their life savings, could not be ignored either.”
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