Jonesborough International Storytelling Center Files Chapter 11

For the last few years my wife and I pass the off ramp to Jonesborough and their big sign for the Storytelling Center on the way to Johnson City. We often remarked how in the world something like that was being supported in a job poor, low-wage region such as this. The only possible way was with outside tourists dollars.

We were in Johnson City during the races at Bristol Motor Speedway avoiding the traffic mess and the inflated prices and went to the local Fuddruckers Restaurant.

We questioned employees there and at other local businesses why they were nearly empty while Bristol Motor Speedway usually flooded the region with visitors. Not only was business down for the last three years in Bristol, but the expected spillover to other nearby communities was nearly absent.

Yet government sanctioned non-profits were excited that the boost in tourism needed additional taxpayer funding to fix the regional poverty problem. The only problem was I could find no proof of the claims after five years of inquiries. Then comes the news in January 2011 that Jonesborough's International Storytelling Center filed chapter 11. I contacted the Center to confirm the rumors and got the following:

Thank you Mr. Loflin for your inquiry. Please see information below:

The International Storytelling Center has filed for Chapter 11 bankruptcy protection. This is an unfortunate but necessary action. ISC will be continuing our operations and programming in 2011 and is committed to the ongoing operations of the Center facilities in downtown Jonesborough, the annual Teller-in-Residence Series and other Jonesborough-based programming, and, of course, the National Storytelling Festival in October of every year.

Chapter 11 will allow ISC to reorganize its financial obligations and enable the Jonesborough-based organization to emerge a stronger entity so ISC can successfully continue its role as a key educational, cultural, and economic force for Jonesborough, Northeast Tennessee, and the nation. All further questions related to our Chapter 11 filing should be directed to our legal counsel, Hunter, Smith & Davis, LLP of Johnson City.

Betsy Kappes
International Storytelling Center
116 W Main St
Jonesborough, TN 37659
Website is at

It seems the Storytelling Center was being floated on $3-$4 in bad debt and government money. Here is a partial list of suckers that got involved in this boondoggle; $700,000 owed to banks and a credit card company; over $100,000 owed to a graphic design business; and about $170,000 owed to the National Storytelling Network.

The biggest sucker of all was the United States Department of Agriculture's Rural Development Program. What does this have to do with farming is beyond me. They got nailed for $2.5 million. In January a judge allowed them to use their remaining $56,000 to keep the facility open.

Panicked creditors descended on the Center. Bank of America got a lien on proceeds from the Center's gift shop in January. But not all is lost according to Stephen Duncan of Hunter, Smith & Davis:

"A business is generally going to consider a chapter 11 if they think they can become profitable or viable ongoing operation. For me personally it would seem to be a fairly significant amount of debt, but you need to compare that and balance it out against their assets." (BHC January 2011)

As of February the Center is back in court trying the get the Judge to reconsider the lien on the gift shop. Their lawyers also want the Judge to void a contract the Center has with the National Storytelling Network. This is 18 percent of their yearly gross of between $160,000 to $190,000.

It's unbelievable how something with that kind of cash flow could even get these kinds of loans. Their Lawyers further claim the Center "has generated nearly $1.9 million for the Network." They have been with the Network since 1998. Ref. BHC February 01, 2011.

In my opinion they should never have gotten most of those loans which seem to be within the last three years or listened to the idiots promoting tourism.