Newcastle Maritime Museum Society and Newcastle council are still deadlocked over the future of the museum collection with one week to go before its storage lease runs out.
The two parties issued conflicting media statements before and after the society's annual general meeting on Tuesday.
The council said it would talk to "the liquidator" about buying items from the museum collection to help the society repay its debts if it voted to wind up.
The council would display items at Newcastle Museum then sell them back to the museum for $1 if a soon-to-be-formed working party found a viable permanent home for the collection.
But the museum issued its own statement saying the council had not "taken the opportunity to discuss the current situation of NMMS debts" and the musuem had no need of a liquidator.
"NMMS has conducted sound legal processes to resolve all major debts and will be pleased to discuss financial arrangements with Council over several remaining small debts," it said.
The society said its constitution precluded it from selling items to pay debts.
The council arranged two years ago to store the 7500-piece collection in a commercial storage shed in Carrington after Hunter and Central Coast Development Corporation evicted the museum from the Honeysuckle A Shed for not paying its rent.
There's a lot of passion in the membership about a possible alteration to the ownership of the collection, but we face the reality that we can't manage it ourselves.- Maritime museum spokesman Peter Sherlock
The council has been pressuring the museum to hand over the collection so at least part of it can be displayed at Newcastle Museum.
Council chief executive Jeremy Bath said on Wednesday that the museum could not sell items to repay its debts but a liquidator could.
It is not clear what will happen to the collection when the lease on the storage space expires on Wednesday if the two parties have not reached an agreement.
The Newcastle Herald has been told that the owners of the storage space have forgone thousands of dollars in income as they have supplied the shed to the council on peppercorn rent.
Museum spokesman Peter Sherlock said the museum had to negotiate with the council because it was "between a rock and a hard place" as the lease expired.
"The society does not have the means to, firstly, move the collection and, secondly, store it," he said.
"There's a lot of passion in the membership about a possible alteration to the ownership of the collection, but we face the reality that we can't manage it ourselves."
The museum statement said the council had "agreed to provide professional curation and management for our collection until the new museum is established".
"A motion was adopted to eventually dissolve NMMS on completion of an acceptable agreement with Newcastle Council," the society said after the annual general meeting.
"It is expected a new maritime society will immediately be formed to participate in the ongoing promotion of the region's maritime heritage."
The two parties did appear to agree that they would be involved in the working party to find a waterfront home for the museum.
Another suggestion emerged on Wednesday to display the museum in a building on Port of Newcastle land at Dyke Point, Carrington, though this site is inside a secure port zone and inaccessible to the public. It also presents a range of other costly obstacles.
The society's media statement said the working party of "leading city stakeholders" would plan the establishment of a "major world-class Maritime and Industrial destination attraction".
"The region's valuable maritime heritage collection is assured of a secure future," its statement said.
"The committee and members of NMMS look forward to working with CN and other city leaders in the development of an important cultural facility for our region."
But the council's statement suggested the museum still had plenty of hurdles to overcome.
"Should a suitable site be identified and leased for 25+ years, City of Newcastle will reasonably consider a request for the transfer of any purchased items formerly belonging to the NMMS, at a cost of $1," it said.
"This consideration will also be dependent on the request confirming the group/organisation has secured sufficient working funds for both the construction of a Museum as well as operational expenditure for a minimum of 10 years.
"A separate lease for a minimum five years must also exist for the storage of the collection."
The museum society owes almost $300,000 to various creditors, including $85,000 to HCCDC in unpaid rent, but insists most of this debt has been waived.
The council statement said "numerous" creditors had contacted City of Newcastle with unpaid museum invoices.
"Each creditor has stated in writing that they have not waived their claim for payment," it said.
"Given it is clear a significant number of creditors remain unpaid, and the NMMS has just several thousand dollars of working funds, City of Newcastle supports the NMMS's proposed motion to dissolve.
"The demise of the Newcastle Maritime Museum is a reminder of the costly nature of operating, curating and maintaining a museum and why City of Newcastle's position remains that the best way of ensuring local maritime items are available to the public is via Newcastle Museum."
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