Nearly one year after Guadalupe River floodwaters killed 28 people at Camp Mystic, the Texas summer camp is seeking Chapter 11 bankruptcy protection while lawsuits from victims' families continue, USA Today reported.
The filing raises questions about whether a business accused of major safety failures can use bankruptcy court to reorganize while grieving families wait even longer for answers and compensation, KUT News reported.
What happened?
On Wednesday, Camp Mystic sought Chapter 11 relief in the U.S. Bankruptcy Court for the Southern District of Texas, according to court records, as its debts rose above $10 million, per USA Today.
The bankruptcy case comes after families filed several lawsuits accusing the camp of failing to protect campers and counselors as floodwaters swept through the grounds.
The broader Hill Country disaster killed more than 130 people across the region and displaced many others from their homes. Among the dead at Camp Mystic were 25 campers, two counselors, and Dick Eastland, the camp's owner.
After backlash from families and growing scrutiny of emergency planning at Texas camps, Camp Mystic did not reopen this summer.
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What does it mean?
The bankruptcy filing could change how the legal fight moves forward. Attorney Angela Littwin, who teaches bankruptcy law at UT Austin's School of Law, told KUT that Chapter 11 typically pauses lawsuits, at least temporarily, and often shifts compensation efforts into the bankruptcy process.
"The most common outcome of a bankruptcy like this is that the lawsuits would not pick up, that they would be settled in the bankruptcy," Littwin said to the outlet. Attorneys for victims' families say the bankruptcy should not erase accountability.
A bankruptcy filing like this can mean a longer, more complicated path to compensation. Rather than pursuing separate cases in open court, victims' families may have to seek compensation from a fund supported by insurance money and company assets.
Attorney Kyle Findley, who represents families impacted by the disaster, described the situation as 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," per KUT.
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