On September 8, 2026, the Official Committee of Unsecured Creditors in In re Camp Mystic, LLC filed a 46-page motion under section 1104(a) of the Bankruptcy Code asking Judge Christopher Lopez to appoint a chapter 11 trustee over all four debtors. The motion carries ten attachments, including transcripts of the July 9 and August 26 meetings of creditors, the Texas Legislature's June 2026 report on the flood disaster, the Travis County temporary injunction, and a plaintiffs' sanctions motion from the state court litigation.

Three more filings were entered the same day. The Certain Heaven's 27 Families, a group of twenty-four of the twenty-six families who lost a child or a counselor at Camp Mystic on July 4, 2025, filed a preliminary objection to the debtors' competing governance motion and then a joinder adopting the trustee motion in full. Lacy and John Lawrence, the one family that lost two daughters, filed their own joinder through Akin Gump.

Objections to the trustee motion are due twenty-one days from filing, which puts the deadline at September 29. The debtors have not yet responded. The Court set a hybrid evidentiary hearing for October 9 on the stay motions and on the debtors' governance motion. A virtual status conference is set for September 23.

The motion's preliminary statement asserts that the cases "will not move forward so long as the Eastland Directors are deciding where they will go," and that the debtors "have no reorganization strategy, no plan, and, by their own chief restructuring officer's testimony, have had no discussions about how to reorganize at all."

The events recited in the trustee motion and in the related filings run from the July 4, 2025 flood through the filings of September 8, 2026.

All four debtors sit under a single family holding structure. Mystic Camps Family Partnership, Ltd. owns one hundred percent of Camp Mystic, LLC, which operated the camp, and one hundred percent of Natural Fountains Properties, Inc., which owns the 725-acre ranch and the improvements on it. The partnership's general partner is Mystic Camps Management, LLC, whose sole member is Willetta "Tweety" Eastland. The limited partnership interests are held by Eastland family members and by the Caroline K. Eastland 2023 Trust and the Anna A. Eastland 2023 Trust.

Governance of all four debtors is held by four members of the Eastland family, each of whom held an operational role at the camp before the flood. The Committee refers to them as the Eastland Directors.

The individual defendants in the state court actions are Willetta Eastland, Edward Eastland, Mary Liz Eastland, George "Britt" Eastland in his capacity as representative of Dick Eastland's estate, and NFP president William Neely Bonner III. Each of the Eastland Directors, along with Dick Eastland's estate, appears in the debtors' schedules as the holder of an undisputed indemnification claim against Camp Mystic, LLC, Natural Fountains Properties, and MC Management. Two other Eastland trusts hold scheduled promissory note claims against Natural Fountains Properties of $1,376,789.04 and $423,627.40.

Karen Nicolaou of Harney Partners was approved as chief restructuring officer on August 18, and the retention order provides that no principal, employee, or independent contractor of Harney Partners and its affiliates may serve as a director of any debtor during the cases. At the section 341 meeting she testified that she consults with debtors' counsel, who in turn take direction from the board of managers of each entity, and that she could not make a decision over the board's objection.

Two of the motion's background sections rest on the Texas Legislature Report, which the Committee attaches as Exhibit B. The Committee asks the Court to take judicial notice of the report, and argues separately that its factual findings are admissible for their truth under the public records exception in Federal Rule of Evidence 803(8), citing United States v. Gluk, 831 F.3d 608, 613-14 (5th Cir. 2016). The motion then quotes all twenty of the report's conclusions verbatim and organizes them under the four headings the legislative committees used.

The report's conclusions include the following. Camp Mystic had no written emergency plan specifying how each occupied building would be evacuated in a flood, and the written plan it did have instructed campers to shelter in place and await instruction. Evacuation procedures were never reviewed with staff and counselors, and specific responsibilities were never assigned. Campers were never instructed on how a flood evacuation would occur.

On the night itself, the National Weather Service upgraded a flood watch to a flash flood warning at 1:14 a.m., naming Hunt as a location that would experience flash flooding. Multiple members of the Eastland family received the alert. No evacuation began until roughly 3:00 a.m. The report concludes that if all campers had been instructed to evacuate their cabins on foot at that hour or earlier, there was ample time and opportunity for all of them to reach higher ground safely. Camp leadership did not call 911 during the flood or immediately afterward.

The motion also recounts the aftermath. At 11:28 a.m. on July 4, the camp emailed parents that "[i]f you have not been personally contacted then your daughter is accounted for." The legislative report found that this email "provided false hope to families who had not yet been called, only to be told later that their daughter was missing." Later that afternoon the camp directed parents to Ingram Elementary, where, the report found, no person or agency took control and parents of missing campers waited alongside parents reuniting with their children.

Texas responded with three statutes signed on September 5, 2025: the Youth CAMPER Act, the Heaven's 27 Camp Safety Act, and Senate Bill 3, which amends the Water Code and Government Code to require flood warning sirens in flash flood-prone areas.

The Committee attaches the August 26 transcript as Exhibit A and the transcript of the July 9 meeting as Exhibit H. The motion cites the August 26 record more than thirty times. It relies on six areas of testimony.

The first concerns authority. Asked whether she could make decisions for the debtors over the board's objection, the chief restructuring officer testified that she could not, because "they're the board." She consults counsel, counsel takes direction from the managers, and the managers are the four Eastland Directors.

The second concerns strategy. She testified that the debtors have had no conversations with her about a plan to reorganize, that she has not discussed with the Eastland Directors whether the debtors intend to seek a future operating license, and that to her knowledge there are no plans to apply for one. When she was asked what the path forward looks like, debtors' counsel stepped in and acknowledged that "at this point, it's difficult to articulate."

The third concerns a $400,000 flood insurance payment the debtors received. The chief restructuring officer testified that she does not have a copy of the underlying policy and that the debtors do not understand the circumstances of it.

The fourth concerns the property. She testified that there is no process for tracking who enters or visits the 725-acre site, that there is no signage identifying the portion subject to the prepetition injunction, and that sixty-four horses currently roam and graze there. Access is controlled by members of the Eastland family and by employees.

The fifth concerns document preservation. The motion notes the five pending wrongful death suits, a spoliation allegation, and an open criminal investigation, and states that she could not identify what steps the debtors have taken to preserve documents and evidence relating to the flood.

The sixth concerns payroll. The debtors employ nine people, including four in camp maintenance, one in horse training and breeding, one in groundskeeping, two in office administration, and one media consultant, at a camp with no operations and no plan to reopen. The Committee notes that at least one employee's duties include administrative work for Edward Eastland, a fact the motion traces to cross-examination at the July 9 hearing rather than to the chief restructuring officer's declaration.

"The Debtors employ these individuals notwithstanding that they have no current operations nor any plans to reopen in the foreseeable future." Committee motion for appointment of a chapter 11 trustee, Dkt. 227 at 23

The debtors filed their schedules and statements of financial affairs on August 7. Collective assets are scheduled at roughly $20 million, most of it the property. The July monthly operating reports show aggregate month-end cash across the four debtors of about $4.8 million, of which $3.16 million sits at Natural Fountains Properties, $1.44 million at Camp Mystic, LLC, $237,576 at MC Family Partnership, and nothing at MC Management. Six insurance policies are disclosed. They include a general liability policy and an excess policy with a $5 million limit.

The statements of financial affairs disclose transfers to seven members of the Eastland family in the year before the petition date.

The global notes to the schedules disclose additional value received by the Eastland family. Members of the Eastland family occupy houses on estate property, use debtor vehicles, and have historically had basic living expenses paid by the debtors, including utilities, gasoline, cable, and internet. George Eastland and his family have occupied a house at Camp Mystic since 2015, Edward Eastland and his family moved into a manufactured house at the camp in June 2026 after their own home was damaged in the flood, and Willetta Eastland has been living in the camp infirmary since the fall of 2025. The debtors marked the value attributed to that use as undetermined.

The monthly operating reports show that family members are reimbursing the estates for electricity. The Committee's review found no comparable reimbursement for rent, vehicle use, or other living expenses. Camp Mystic's July report reflects $27,222 in total receipts for the period ending July 31, of which $2,305 is family expense reimbursement.

The Committee advances three theories of cause.

Incompetence and gross mismanagement

The statutory text reaches mismanagement "either before or after the commencement of the case," and the Committee cites In re Sharon Steel Corp., 871 F.2d 1217, 1227 (3d Cir. 1989), for the proposition that current management must be free of the taint of prior management. The motion states that, except for Dick Eastland, the same senior family members who ran the camp before the flood govern the debtors today, and that the Eastland Directors reviewed and signed off on the schedules and statements collectively before filing.

The postpetition conduct is pleaded as a continuation of the same pattern. The Committee groups it under self-dealing, failure to protect estate property, unfamiliarity with a major estate asset, the absence of any reorganization discussion, and a payroll that serves no operating business. A footnote cites Woodlawn Community Development Corp., 613 B.R. 671, 684-85, for the point that failure to collect rent supports both incompetence and a self-dealing finding that is itself independent cause.

Irreconcilable conflicts

The motion argues that conflicts of interest can constitute cause independently, citing In re Cajun Electric Power Cooperative, Inc., 74 F.3d 599 (5th Cir. 1996), along with In re Westbank Holdings, LLC and In re Patman Drilling International, Inc. from within the circuit. It identifies five respects in which it contends the directors' interests and the estates' interests diverge: co-defendant status in the state court actions, indemnification and trust claims against the estates, a financial and residential interest in the property, exposure to a criminal investigation the Committee says could expand beyond the corporate debtor, and potential estate claims for breach of fiduciary duty against the directors.

On the last point the motion quotes In re Sillerman, 605 B.R. 631, 647 (Bankr. S.D.N.Y. 2019), on the difficulty of tasking a debtor with bringing avoidance actions against a family member, and In re Russell, 60 B.R. 42, 48 (Bankr. W.D. Ark. 1985), for the proposition that it is unreasonable to suppose a debtor in possession would choose to sue itself. The chief restructuring officer testified that she has not evaluated any potential estate claims against the debtors' fiduciaries.

Acrimony

The third theory rests on In re Marvel Entertainment Group, Inc., 140 F.3d 463, 472-74 (3d Cir. 1998), where deep-seated conflict and animosity between a debtor in possession and its creditors supported a trustee, and on In re Stream TV Networks, Inc., 2024 WL 87639, at *33-34 (Bankr. E.D. Pa. Jan. 5, 2024). The Committee identifies the sources of acrimony as recruiting families for the 2026 season within three months of the flood, litigating against the prepetition injunction, withholding discovery, and conduct by defense counsel in the state court that drew a sanctions motion alleging, among other things, a statement in open court that plaintiffs' counsel were "going to burn in hell."

The Committee served informal requests on August 5 and Rule 2004 discovery on August 24. Its motion reports that the debtors have produced fewer than 500 documents, more than half of which are publicly available.

Section 1104(a)(2) provides an independent basis for appointment that does not require a finding of cause. The motion works through the four-factor balancing used in In re Ford Steel, LLC, 629 B.R. 871, 889-90 (Bankr. S.D. Tex. 2021), and applied in Sillerman, Westbank Holdings, and In re Eletson Holdings Inc., 659 B.R. 426, 453-54 (Bankr. S.D.N.Y. 2024).

On the fourth factor, the motion addresses cost directly. Willkie Farr & Gallagher, Lawson & Moshenberg, and FTI Consulting have each agreed to serve pro bono, as stated in their retention applications filed September 4. The Committee states that it has already approached potential trustee candidates and replacement counsel willing to work on a low or no-cost basis, and that it would work with a trustee immediately on plan structures and asset monetization.

The motion also addresses the number of trustees. Under Bankruptcy Rule 2009(c)(2) a common trustee may be appointed for jointly administered estates, and the Committee argues that only one is needed here, citing Ritchie Special Credit Investments, Ltd. v. U.S. Trustee, 620 F.3d 847, 854-55 (8th Cir. 2010).

One week before the trustee motion, the debtors filed their own governance motion under sections 105(a), 363, 1107(a), and 1108, together with provisions of the Texas Business Organizations Code. It would appoint Mark Andrews of Trinity River Advisors as independent manager of Camp Mystic, LLC and the Hon. Craig A. Gargotta, until earlier this year the Chief Bankruptcy Judge for the Western District of Texas, as independent director of NFP. Each would constitute a one-person special committee. Judge Gargotta would serve without compensation. Mr. Andrews would be paid $15,000 per month.

The motion states that the existing structure "invites doubt" about the debtors' decision-making given that the managers and directors are both co-defendants in wrongful death actions and claimants asserting indemnification rights against the estates, and that the independent fiduciaries "remove that doubt."

The motion gives the ground lease as the reason for appointing two fiduciaries rather than one. Camp Mystic, LLC is the tenant under a June 1, 1998 ground and building lease with NFP as landlord. The motion states that decisions about rent adequacy, continuation of the post-flood rent abatement, lease assumption or rejection, and any disposition of the property require adverse advocacy on behalf of each entity, and that a single fiduciary serving both cannot provide it.

The proposed order allocates authority as follows.

The proposed order includes several additional provisions. Neither fiduciary may be removed and the governance amendments may not be rescinded without a further order of the Court. Matters affecting more than one debtor require both fiduciaries acting jointly. Any impasse between a special committee and a full board over a recommended sale, settlement, or plan filing must be disclosed to the Court, the Committee, and the U.S. Trustee within seven days. Quarterly reports would cover delegated matters, intercompany transactions, and the progress of any insider claim investigation.

The Families' preliminary objection runs six pages, and its argument is statutory. Its lead authority is In re Adelphia Communications Corp., 336 B.R. 610, 664 (Bankr. S.D.N.Y. 2006), where Judge Gerber declined to use section 105(a) to install a fiduciary who would function as a trustee in substance. The objection quotes the passage warning against using section 105(a) to create substantive rights otherwise unavailable and to invent remedies that overstep statutory limitations, and pairs it with the Fifth Circuit's formulation in United States v. Sutton, 786 F.2d 1305, 1308 (5th Cir. 1986), that section 105(a) is not a roving commission to do equity. More recent circuit and district authority follows, including In re Highland Capital Management, L.P., 132 F.4th 353, 358 (5th Cir. 2025).

The objection's second argument concerns the reserved authority. It contends that the three decisions left with the full boards are the decisions that will resolve these cases, and that each is one in which every board member is personally interested. The objection asks how the Eastlands can have the final say on settling claims against themselves, on selling property in which they hold an economic interest and on which they are living without paying rent, and on filing a plan that must address both. It answers: "they cannot and should not."

The objection identifies two items it says the motion omits. It does not describe how an impasse between the appointees and existing management gets resolved, and it does not disclose the cost of the directors and officers coverage the debtors propose to buy at estate expense. The existing package policy contains no directors and officers liability part, and the debtors ask for authority to bind coverage, including Side A-only coverage, before service begins.

The objection also addresses the debtors' supporting precedent. The debtors cite In re Instant Brands Acquisition Holdings Inc. and Highland, both of which concern plan exculpation for estate fiduciaries exercising trustee-like functions. The Families call the analogy a stretch too far and note that the debtors identify no case, in this district or anywhere, where management conflicts were cured by the postpetition appointment of independent directors over the objection of the principal parties in interest.

All three creditor filings of September 8 took the same position. The Lawrence joinder, filed through Akin Gump, argues that the debtors have spent more than two months protecting insiders from prepetition suits, including by seeking to extend the automatic stay for their benefit. The Families' joinder adopts the trustee motion, their stay relief motion, and their governance objection together, and asks the Court to direct the U.S. Trustee to appoint a trustee forthwith. As of September 13, 2026, no party has filed in support of the debtors' governance motion.

Two other contested matters are set for the October 9 hearing. The Families moved on August 31 to modify the stay so the five state court actions can proceed to final judgment against both the debtors and the individual defendants, and so the two families who have not yet sued can file. The motion seeks liquidation rather than collection, and proposes that the families return to the bankruptcy court to collect on any judgment.

The motion's principal theory is bad faith under In re Little Creek Development Co., 779 F.2d 1068, 1072 (5th Cir. 1986), which permits a court to look at whether a filing is intended to achieve reprehensible purposes. The motion argues that these cases were filed to gain tactical advantage in the state court actions on the eve of rulings on sanctions and arbitration, and it supports that with the removal on July 13 ahead of a July 15 Travis County status conference, the venue transfer motion two days later, and the adversary proceeding on August 5. The Sonnax factors are argued in the alternative, including the point that the bankruptcy court cannot liquidate personal injury tort claims under 28 U.S.C. section 157(b)(2)(B) and (b)(5).

The debtors' adversary proceeding seeks a declaration that the automatic stay reaches the non-debtor Eastland defendants, together with a preliminary injunction to the same effect. The agreed scheduling order Judge Lopez signed on September 1 governs all of these matters, and the parties resolved the protective order question by stipulation on September 11.

The general bar date of September 18 precedes the October 9 hearing by three weeks. The Families assert in their stay relief motion that, as reflected in the debtors' schedules, there are no significant non-insider claims against the estates other than their own. The Internal Revenue Service filed a proof of claim on September 10, 2026.

Three contested matters are set for hearing on October 9, 2026. The trustee motion is on a separate track, with objections due September 29, 2026 and no hearing date set as of September 13, 2026.

The first issue is statutory. The debtors seek their governance structure under sections 105(a), 363, 1107(a), and 1108 of the Bankruptcy Code, together with sections 21.403, 101.052, and 101.356 through 101.359 of the Texas Business Organizations Code. The Families argue that section 105(a) cannot authorize the appointment of a fiduciary that functions as a trustee in substance, citing Adelphia, Sutton, and Highland Capital. The debtors' cited authority on the appointment question consists of Instant Brands and Highland Capital, both of which address plan exculpation for estate fiduciaries exercising trustee-like functions. The Families state that the debtors cite no case in which management conflicts were addressed by the postpetition appointment of independent directors.

The second issue is evidentiary. The Committee's cause theory rests on testimony that the debtors have no reorganization strategy, no plan to seek an operating license, no identified document preservation steps, and no evaluation of estate claims against their own fiduciaries. Depositions of the debtors' corporate representatives are to be completed by September 28, and the debtors' reply brief on the stay motions is due October 2.

The third issue concerns the relationship between the two operating debtors. The debtors state that the 1998 ground lease between Natural Fountains Properties and Camp Mystic, LLC, the rent abatement in place between the flood and the petition date, and the July 5, 2025 lease amendment deferring rent require a separate fiduciary for each entity. The Committee requests a single trustee across all four estates under Bankruptcy Rule 2009(c)(2), citing Ritchie Special Credit Investments.

As of September 13, 2026, the debtors have not filed a response to the trustee motion, and the Committee has not filed its stated objection to the governance motion.