HUNT, Texas – After Camp Mystic filed for bankruptcy Wednesday, questions came in about what this means for the company and the lawsuits against the camp.
27 girls and camp director Dick Eastland died in the July fourth floods.
The camp has faced several investigations into its handling of the flood response, and recently decided not to open it’s second campus this summer to 900 families who had signed up to attend.
Just before the one-year mark of the tragedy, Mystic filed for Chapter 11 bankruptcy.
Experts explain there are three types of chapter 11 bankruptcy:
- Liquidating: a company dissolves
- Sale: a company is sold
- Reorganization: a company creates plan to stay open and pay debts
Mystic filed for reorganization, which typically means the business is trying to survive, but has high debt and needs.
“It’s generally an opportunity for financial rebirth, St. Mary’s School of Law Asst. Professor Abigail Bright Willie said. ”We get to reorganize all of our debts. We get pay our creditors the best that we can and we get to come out the other side, essentially. A new business entity.”
Willie said these cases can take years.
“They can. Hopefully they won’t,” Willie said. “Hopefully this case will be able to exit within 24 months.”
Documents show Camp Mystic’s debts amount to more than $10 million. Willie said the camp will soon have to submit forms breaking down exactly what they owe.
“So that the public, all the creditors and the court knows the total financial picture,” Willie said.
Delayed lawsuits
With Mystic filing for bankruptcy, lawsuits are “stayed,” according to Willie.
“That means they can’t go forward,” Willie said, “but the public should be reassured. The bankruptcy court will ultimately make a determination as to what those families are owed.”
The lawsuits filed are state cases, and bankruptcy courts are federal. If the families want the lawsuits to remain in the state, their lawyers will have to request that from the bankruptcy court.
Wednesday, KSAT heard from two of the attorneys representing different sets of families that are suing Mystic.
Kyle Findley, an attorney representing six Mystic campers’ families, confirmed this bankruptcy filing will cause delays but, “The firm is evaluating our options, but the case will continue to be pursued.”
Findley continued in his statement, saying, “The bankruptcy filing is not accountability. It is simply a financial reorganization that could allow the same people and entities to remain in control of Camp Mystic while attempting to circumvent the justice of the Court. After 27 girls died, this filing is just another attempt to delay taking responsibility.”
Paul Yetter, the attorney for another set of Mystic families sent KSAT a statement saying, “Bankruptcy will not stop all responsible parties from being held accountable.”
KSAT has also reached out to Camp Mystic to see if they want to make a statement about the bankruptcy filing, but they have not responded yet.
Read also: