😷New Chapter 11 Bankruptcy Filing - Inspired Healthcare Capital LLC😷
Healthcare co. "inspired" by lender distributions and fraud files chapter 11
On February 2, 2026, Scottsdale, AZ- based Inspired Healthcare Capital, LLC (the “debtor sponsor”), Inspired Healthcare Capital Holdings, LLC (“holdings”), and 159 affiliates (collectively, together with the debtor sponsor and holdings, the “debtors”) filed chapter 11 sale cases in the Northern District of Texas (Judge Mullin). Per Benjamin Jones, the debtors’ CRO and managing director at Ankura Consulting Group, LLC, the debtors, which were founded in ‘16, “…acquire or develop and oversee upscale Senior Living Communities (‘Communities’) throughout the country,” each of which “… offers its residents [] a welcoming and peaceful place where they are treated with dignity.”
So feel-good for the debtors’ ~2.6k residents across 33 operating facilities.*
Less so for others in the cap stack.
Before that, some background. To raise capital to open new communities and grow the business, the debtor sponsor took two approaches. Initially, it privately placed debt and equity via now-debtor investment funds, the proceeds of which were supposed to finance affiliate developments, provide short-term bridges to affiliates , or invest in real estate. Then, starting in ‘20, the debtors got craftier by raising capital using Delaware statutory trusts (“DSTs”), selling the beneficial interests in the the trusts and allowing investors to potentially reap substantial tax benefits through a 1031, like-kind exchange.** The debtors used those proceeds to purchase properties held by equally-now-debtor DSTs, each of which, for tax-law reasons (😴), served as a landlord to a now-debtor master tenant (collectively, “MTs”) and is managed by a now-debtor signatory trustee (collectively, “STs”).*** It’s complicated, but Mr. Jones — or, said more truthfully, a lackey — sketched up a summary of how it all works:
Either way, the capital-raising strategy bore fruit, and the debtors were able to rake in heaps of dough; more than $1.2b in cash from 3.3k fund investors and 2.3k DST investors, as well as another ~$20mm from 200+ saps looking to fund two specific properties known as Creswell and Winery Lane, which they used to “… acquir[e] nine (9) Communities in 2021 and another thirteen (13) Communities in 2022 … seven (7) Communities in 2023, two (2) in 2024, and one (1) in 2025.”
Here’s where things stopped working:
“Of the 31 DST Communities, only 8 operated without direct cash subsidy from the Debtor Sponsor, and all the Communities received services from the Debtor Sponsor for which they did not pay.”
As of the petition date, those services amounted to ~$59mm in accrued and unpaid fees.
An attempt to capture ancillary “verticals” did not help either:
“As the portfolio of Communities grew, the Company expanded into new business lines to capture additional revenue sources. Among other things, the Company established a management company, Volante Senior Living (‘VSL’), so it could wholly manage the Communities, as well as marketing, construction, development, and architectural-design companies to support the Company, Communities, and Development Projects (collectively, the ‘Verticals’). The Company was unable to operate these Verticals successfully and ultimately discontinued operations at each Vertical.”
The entire concept ended up being “… a significant cash drain on the Company …” and as of the petition date, the vertical entities no longer operate.
Bad ops aside, “non-business related cash uses” sure as sh*t did no good for the debtors. Per Mr. Jones:
“Money was used by former management to acquire luxury cars, a condo in Las Vegas, and for significant non-business expenses and purchases, including the purchase of real estate titled in a non-debtor company’s name owned by [former CEO and founder Luke] Lee and his wife and the payment of personal expenses.”
Is that fraud? Sure smells like it, but Mr. Jones brushes it under the rug and attributes the filing to this:
“The largest contributing factors to the Company’s entry into bankruptcy were (a) underperformance at certain communities and (b) the decision to prioritize investor distributions … The Debtor Sponsor would make up the shortfall to Master Tenants of underperforming Communities by providing funds from the Investment Funds and other sources so that the Master Tenant could continue to pay debt service and make distributions to investors. Holdings contributed approximately $86 million to 23 Master Tenants to cover shortfalls at the Communities and make debt service and investor distributions.”
No doubt that’s meaningful, but we aren’t letting Mr. Lee off the hook so fast. No doubt driven by his decision-making, in April ‘25, US Securities & Exchange Commission launched an investigation into the company, which remains pending today. By pure coincidence, 🙄, two months later, the debtors decided it was time to start conserving cash. In June ‘25, they turned off cash flow to fund and DST investors, and in October ‘25, the debtors stopped making debt service payments. Unsurprisingly, investors and lenders weren’t happy with the decision. Ergo:
“Because of the suspended investor distributions and debt-service payments, certain investors and lenders have filed lawsuits against the Company. The lawsuits include four receivership actions filed in Georgia, Florida, and Nevada, an investor suit in Arizona, and a foreclosure auction in Grapevine, Texas, scheduled for February 3, 2026.”
Ergo, bankruptcy.
In it, the debtors are going to pursue a sale, although they haven’t yet lined up a stalking horse. But if the properties are as nice as the debtors suggest, they ought to be able to rustle one up. There’s ample opportunity; here’s the proposed, relatively lengthy timeline:
To fund the cases, the debtors have also secured a $35mm DIP term loan ($10mm interim) from third-party lender Lapis Municipal Opportunities Fund V LP (“LMOF”), which bears interest at 11.5% and features (i) a 1.25% PIK commitment fee, (ii) a 0.95% exit fee, and (iii) a 2% “break-up” fee if the facility doesn’t close or is taken out by another facility (reduced dollar-for-dollar by the prior fees and interest paid).
That last fee is curious. What could be driving it? Oh, the debtors’ 15-credit-agreement, secured, prepetition cap stack, which looks like this …
… and Provident Bank, Integrity Life Insurance Company, UMB Bank, N.A. (successor by merger of HPI Fairmount Lender, LP), and HPI Real Estate Services & Investments (successor by assignment to Texas Security Bank) having objected to the relief (here, here, here, and here) to the extent the debtors are trying to prime them or use their cash collateral.
Perhaps one of them will step in ahead of the second-day? Maybe. On February 4, 2026, the court held the first-day hearing, preserved the objectors’ issues for later, and granted all other requested relief. The second-day hearing will go forward on March 3, 2026, at 1:30pm CT.
The debtors are represented by McDermott Will & Schulte LLP (Daniel Simon, Carmen Dingman, Landon Foody, Marcus Helt, Jack Haake) as legal counsel, Ankura Consulting LLC (Ben Jones) as financial advisor and CRO, and Raymond James & Associates (David Fields) as investment banker. The independent manager of the debtor sponsor and holdings is CRS Capstone Partners LLC (James Calandra), while the independent manager of the STs is Trinity River Advisors, LLC (Mark Andrews). LMOF is represented by Foley & Lardner LLP (Adrienne Walker, Michelle Saney, Thomas Scannell, Nora McGuffey) as legal counsel. Provident Bank is represented by Riker Danzig, LLP (Joseph Schwartz, Curtis Plaza, Jorge Sanchez) and Carrington, Coleman, Sloman & Blumenthal, L.L.P. (Mark Castillo, Michael Sutherland, Robert Rowe) as legal counsel. Integrity Life Insurance Company is represented by Bradley Arant Boult Cummings LLP (George Barber) as legal counsel. UMB Bank, N.A. is represented by Spencer Fane LLP (Eric Johnson, Brian Devling, Andrea Chase, Jason Kathman) as legal counsel. HPI Real Estate Services & Investments is represented by Husch Blackwell LLP (Buffey Klein, Thomas Zavala, Lynn Hamilton Butler) as legal counsel.
*There’s also an empty, hurricane-damaged senior facility in Florida.
**Here’s a short FTI primer for you lazy rascals.
***There are 31 paired (thrupled?) DSTs, MTs, and STs, explaining, in part, the large number of filers.
****There are also intercompany loans, a lot of which were entered into in the months or days leading up to bankruptcy. Meanwhile, the Creswell and Winery Lane properties have, respectively, ~$2.6mm and ~$2.7mm in mechanics’ liens asserted against then, and debtor IHC – Augusta II Propco, LLC has $234k in architectural liens filed. Plus, there are unsecured liabilities, most of which are owed to investment funds:
Company Professionals:
Legal: McDermott Will & Schulte LLP (Daniel Simon, Carmen Dingman, Landon Foody, Marcus Helt, Jack Haake)
Financial Advisor/CRO: Ankura Consulting LLC (Ben Jones)
Investment Banker: Raymond James & Associates (David Fields)
Independent Manager of Inspired Healthcare Capital, LLC and Inspired Healthcare Capital Holdings, LLC: CRS Capstone Partners LLC (James Calandra)
Independent Manager of the Signatory Trustees: Trinity River Advisors, LLC (Mark Andrews)
Claims Agent: Epiq (Click here for free docket access)
Other Parties in Interest:
DIP Lender: Lapis Municipal Opportunities Fund V, LP
Legal: Foley & Lardner LLP (Adrienne Walker, Michelle Saney, Thomas Scannell, Nora McGuffey)
Prepetition Secured Creditor and Objector: Provident Bank
Legal: Riker Danzig, LLP (Joseph Schwartz, Curtis Plaza, Jorge Sanchez) and Carrington, Coleman, Sloman & Blumenthal, L.L.P. (Mark Castillo, Michael Sutherland, Robert Rowe)
Prepetition Secured Creditor and Objector: Integrity Life Insurance Company
Legal: Bradley Arant Boult Cummings LLP (George Barber)
Prepetition Secured Creditor and Objector: UMB Bank, N.A.
Legal: Spencer Fane LLP (Eric Johnson, Brian Devling, Andrea Chase, Jason Kathman)
Prepetition Secured Creditor and Objector: HPI Real Estate Services & Investments
Legal: Husch Blackwell LLP (Buffey Klein, Thomas Zavala, Lynn Hamilton Butler)
Other Party In Interest: JDI Loans, L.L.C.
Legal: Fox Rothschild LLP (Brett Axelrod, Trey Monsour)