Holders of bonds sold for the Sports Museum of America by the New York Liberty Development Corp. could find themselves fighting for scraps in bankruptcy court following the financially troubled museum's failure to restructure $57 million of bonds, and its closure on Friday.

"The bondholders will just have to deal with the situation in all likelihood in a Chapter 7 context," said the for-profit museum's attorney, David Warburg, a partner at Seyfarth Shaw LLP. Talks are still underway with potential buyers of the museum, "but nothing concrete," he said.

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