Not sure what this means, there’s not a lot of information out there about this yet.
Camp Mystic summer camp has filed for bankruptcy after 25 young girls, two counselors and a camp director were killed in July 4 flash floods last summer.
The summer camp filed for bankruptcy as part of a set of Chapter 11 cases involving affiliates of Mystic Camps Family Partnership, according to online court documents. Other affiliates listed include Natural Fountains Properties, Inc, Mystic Camps Family Partnership, Ltd and Mystic Camps Management, LLC. In filing for Chapter 11 bankruptcy, an entity typically proposes a reorganization plan so that it can stay afloat while paying off its debts, according to federal courts information.
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The bankruptcy petitions were filed early Wednesday, according to online records.
The filing says the property may pose a threat to safety and needs to be physically protected from weather events. It also notes that its assets include perishable goods and items that could quickly lose value without attention.
Estimated assets are listed between $100,000 and $500,000 with liabilities listed between $10 million and $50 million, according to court records.
Willetta A. Eastland, Richard G. Eastland, Jr., George A. Eastland and Edward S. Eastland are listed in the filing as managers of Mystic Camps Management, LLC.
The law firm of Vartabedian Katz Hester & Haynes LLP, with offices in Fort Worth, Dallas and Houston, will represent the company through bankruptcy proceedings, according to court documents.
Most of the coverage I’ve seen of this so far has just been the bare fact of the filing and a recap of the flood and the lives that were lost and the ongoing investigations and litigation. The Statesman adds some context.
Paul Yetter, a Houston attorney representing seven families suing the camp over their daughters’ deaths, said the court fight will continue.
“Bankruptcy will not stop all responsible parties from being held accountable,” he said. “These innocent girls deserve justice.”
Mark Lanier, who is representing six families who lost daughters, said his firm anticipated the bankruptcy filing and was reviewing it to determine whether there are grounds to ask the court to lift the bankruptcy stay.
“The Camp Mystic defendants have done everything they can to avoid the light shining on their actions in the court of public opinion and the court of law,” the Houston attorney said. “We’re fighting them every step of the way.”
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The bankruptcy filing estimates Camp Mystic has more than 1,000 creditors, could owe as much as $50 million and has assets in the range of $100,001 to $500,000. It is seeking a complex case designation due to the large debt and number of creditors.
The filings in Houston also pause collection efforts. The businesses that filed for bankruptcy protection are Camp Mystic LLC, Natural Fountains Properties Inc., Mystic Camps Family Partnership Ltd. and Mystic Camps Management LLC.
Camp Mystic, the Eastlands and attorneys for them and the associated entities did not respond to requests for comment.
The bankruptcy does not necessarily mean parents and others suing Camp Mystic will never recover damages, said Randy Pulman, a San Antonio bankruptcy attorney. They could still go after proceeds from the camp’s insurance policies and sale of its 750 acres of land in Kerr County.
“It doesn’t spell absolute defeat, but it makes clear there is a very limited amount of assets that these families will be able to recover from,” he said. “There isn’t going to be enough money here to pay everybody.”
The real estate was assessed last year at about $15 million by the Kerr Central Appraisal District, but there’s certain to be legal wrangling over whether the land is protected from the lawsuits, Pulman said.
The bankruptcy doesn’t stop the flooding victims’ families from suing members of the Eastland family in their individual capacity, either. Several of the Eastlands have already been named as defendants in lawsuits.
Randy Howry, another attorney representing the families, said that while the filing wasn’t a surprise, the timing was.
“We’re in the middle of pretrial maneuvering at the courthouse, none of which has been going well for Camp Mystic,” the Austin lawyer said. “We were awaiting a ruling on the motion for sanctions, which we filed against Camp Mystic and its lawyers during the course of the litigation. We got word yesterday that the judge was close to issuing orders.”
Because of the bankruptcy, the judge now may not be able to rule, Howry said.
He also questioned the camp’s choice of venue, filing for bankruptcy in Houston rather than San Antonio or Austin, both of which are nearer the camp.
“In terms of fighting this, there are also other possibilities that relate to motions to dismiss because the filing was done in bad faith,” Howry said.
Chapter 11 allows the camp to continue operating while it reorganizes its finances under court supervision and develops a plan to repay creditors. If it cannot successfully reorganize or chooses to shut down, the case may be converted to Chapter 7, in which a trustee liquidates the assets and distributes the proceeds to creditors.
I did assume this would have some effect on the lawsuits, so that’s all good to know. I’m sure the Camp Mystic defendants have their own take on their actions, but they didn’t comment in this story. This ABC News story has their perspective on the broader issues.
In a previous statement to ABC News in response to the lawsuits filed by families, Camp Mystic said, “We continue to pray for the grieving families and ask for God’s healing and comfort.”
Jeff Ray, legal counsel for Camp Mystic, said in a statement, “We intend to demonstrate and prove that this sudden surge of floodwaters far exceeded any previous flood in the area by several magnitudes, that it was unexpected and that no adequate warning systems existed in the area.”
“We disagree with several accusations and misinformation in the legal filings regarding the actions of Camp Mystic and Dick Eastland, who lost his life as well. We will thoroughly respond to these accusations in due course,” Ray added.
Perhaps they have more time for that now. One more lawyer’s view on the bankruptcy filing is this one.
Chapter 11 bankruptcy is designed as a business reorganization tool available to nonprofits and individuals, attorney Alex Wathen said. “The sad thing about this is it’s probably going to mean that the victims’ families are not going to receive much compensation,” Wathen said. “With so few assets, and the asset figures from the petition being only estimates, we don’t know how many claims there are without looking at the lawsuits.”
Despite the financial challenges, Wathen emphasized that reorganization could benefit victims. “If we want to have any sort of meaningful compensation to the victims’ families, the camp is going to have to continue operating,” Wathen explained. “And maybe as a nonprofit, they can raise money to help the victims’ families as part of that reorganization process.”
Judge Christopher Lopez, assigned to the case, will grant the camp exclusivity to propose a reorganization plan for several months—potentially extending to a year. After that period, creditors and the likely victims’ families committee can propose alternative plans, either reorganizing or liquidating the camp’s assets.
So that’s what we know now. I’m sure the litigants will have some motions to file in response, and we’ll go from there. This is all going to take time. The Associated Press has more.