😞New Chapter 11 Bankruptcy Filing - Camp Mystic LLC 😞
Tragic flood forces summer camp to file freefall chapter 11 bankruptcy
On June 24, 2026, Camp Mystic LLC and three affiliates (the “debtors”) filed chapter 11 bankruptcy cases in the Southern District of Texas (Judge Lopez) and we’re gonna be up front here: we’ve got no jokes for this one.
Originally built in 1926, the debtors own/operate a private Christian girls summer camp named Camp Mystic in the hill country of west-central Texas. You probably (and unfortunately) heard of it:
Heartbreaking, and as good as reason as you’re ever going to have to go hug your kids this very moment.
Kids that, in at least some cases, are home this summer rather than away at camp. The debtors, which filed with an estimated $1-10mm in assets and $10-50mm in liabilities, didn’t open their doors this summer amidst political pressures. Pressure that is entirely understandable — a recent joint report from the Texas legislature suggests much could have been done to prevent the tragedy, a point that an ad hoc group of victim families (the “ad hoc group”), represented by Gray Reed (Jason Brookner, Lydia Webb), raised at the June 30, 2026 first day hearing.
The benefit of hindsight, however, is a day late, a dollar short for the victims’ families, who, along with claims for tuition deposits, compose the debtors’ entire top 30 list, 😔.
As mentioned above, the court held an initial first-day hearing on June 30, 2026, where the only items on the agenda were joint administration and a request to continue paying the debtors’ eleven employees. The latter one was … not well received.
From a legal standpoint, we mean. CRO Karen Nicolaou was retained around “… dusk …” on June 26, 2026 — aka the petition date — and her first day declaration was filed about an hour later. Tucked into it, she tried to form the basis to pay employees and a $2k/month stipend to William Neel Bonner, III, the “… 1099 …” president of debtor Natural Fountains Properties, Inc.
The court did not give authority for the second half of that ask. After Akin Gump Strauss Hauer & Feld LLP’s (“Akin”) Marty Brimmage, on behalf of, 😞, his former colleague and partner and restructuring attorney Lacy Lawrence and her husband John Lawrence — the parents of two children victims to the tragedy — forced Ms. Nicolaou to take the stand and probed her on her position and her general knowledge of the debtors, it became abundantly clear Ms. Nicolaou lacked … erm … let’s just keep it at that … lacked.
Again, we mean no jokes on this one. Suffice it to say, the performance at the hearing did not constitute a good look for the debtors’ pros.
Nor, consequently, was it pleasant. After about 100 minutes of stumbling and fumbling, Judge Lopez had enough. Mr. Bonner’s gonna have to wait on that stipend, he decided, although other employees, not a single one of which could be named by the declarant live, slipped through.
The debtors, however, will have another, hopefully-better-prepped bite at the Mr. Bonner apple tomorrow — July 9th, 2026 (1pm CT) — at a hearing during which the court will also let them shoot their first shot on other customary first-day relief.
Our hearts go out to the Lawrences and the other victims and their families.
The debtors are represented by Vertabedian Katz Hester & Haynes LLP (Martin Sosland, Candice Carson, Jeff Prostok, Emily Chou, Suzanne Rosen, Lynda Lankford, Deirdre Brown, Mary Stanberry) as legal counsel and Harney Partners (Karen Nicolaou) as financial advisor and CRO. The aforementioned ad hoc group is represented by Gray Reed (Jason Brookner, Lydia Webb). Lacy Lawrence and John Lawrence are represented by Akin (Marty Brimmage, Roxanne Tizravesh) as legal counsel.
Company Professionals:
Legal: Vertabedian Katz Hester & Haynes LLP (Martin Sosland, Candice Carson, Jeff Prostok, Emily Chou, Suzanne Rosen, Lynda Lankford, Deirdre Brown, Mary Stanberry, Daniela Rakowski)
Financial Advisor/CRO: Harney Partners (Karen Nicolaou)
Claims Agent: Epiq (Click here for free docket access)
Other Parties in Interest:
Ad Hoc Group of Certain Heaven’s 27 Families
Legal: Gray Reed (Jason Brookner, Lydia Webb)
Lacy Lawrence and John Lawrence
Legal: Akin Gump Strauss Hauer & Feld LLP (Marty Brimmage, Roxanne Tizravesh)