Will Chapter 11 Bankruptcy Save Debbie Reynolds' Movie Museum?Debbie Reynolds, the famous actress who appeared in many 1950’s and 1960’s movies, won the approval of her Chapter 11 bankruptcy reorganization plan this week; but will her dream to open a museum showcasing her Hollywood memorabilia collection survive?

Reynolds’ Chapter 11 bankruptcy reorganization plan says that if the museum was able to secured a $4 million advance from a potential developer, then they could repay creditors from the proceeds of the museum’s operation.  But if it was not able to secure the advance, they would need to liquidate the museum’s collection and use the proceeds to pay off creditors.  Unfortunately for Reynolds, the developer failed to secure the needed financing which could mean that the collection, which includes Marilyn Monroe’s white “subway grate” dress could end up on the auction block.

The liquidation scenario laid out in the museum’s Chapter 11 plan calls on a “nationally recognized auction house,” like Christie’s, Julien’s Auctions, Sotheby’s or Profiles in History, to sell off at least $5 million worth of memorabilia in auctions spaced at least six months apart…The plan allows the museum to at any time sell all or a portion of the collection directly to a third-party buyer.

Debbie Reynolds’ son, Todd Fisher who is also the museum’s president, says that they will seek to hire Christie’s and hold the auction by June of 2011.  The actress is said to be heartbroken about the loss of her collection which she has been gathering for decades.   It is not currently clear how many pieces of the collection will need to be sold in order to meet the $5 million requirement of the bankruptcy plan; but it is possible that it could be enough to totally dash any possibility of the museum opening.