Corvias Campus Living - USG, LLC, which manages student housing for approximately 10,000 beds across nine Georgia university campuses, filed a liquidation plan in Delaware bankruptcy court that would sell its assets back to the state university system for $208.5 million, unwinding a decade-long public-private partnership that succumbed to pandemic-related pressures and declining enrollment.
The Chapter 11 plan, filed October 8 in the U.S. Bankruptcy Court for the District of Delaware (Case No. 25-11214), proposes to sell substantially all assets to The Board of Regents for the University System of Georgia (BOR), the same state entity that originally partnered with Corvias in 2014. The transaction would provide $205 million to noteholders who are owed $660.5 million, representing approximately a 31% recovery on their claims.
"The Debtor faced structural challenges and liquidity pressures that made continued operations unsustainable," according to the filing prepared by Morris, Nichols, Arsht & Tunnell LLP, which represents the debtor. "COVID-19 impacts, rising operating costs without commensurate rent increases, and declining student occupancy created persistent economic imbalance."
Partnership Collapse After Decade of Operations
The public-private partnership began in 2014 when the BOR selected Corvias to manage student housing across nine University System of Georgia campuses. Under the arrangement, Corvias financed $548.3 million in senior secured notes in May 2015 to fund construction of new beds, renovate existing facilities, and retire approximately $312 million of pre-existing BOR debt.
The partnership structure called for Corvias to receive management fees while turning over most net operating income to the BOR as rent payments. However, the company's financial troubles mounted over recent years, with the notes falling into default in 2020. Since then, noteholders have controlled the company's cash accounts and required monthly funding requests for operating expenses.
The filing reveals that by mid-2025, Corvias faced immediate cash shortfalls, including a required $2.27 million capital repair payment and a $16.9 million interest payment on the notes. "Without chapter 11 relief, the Debtor would have been unable to meet these obligations," the company stated.
Mediation Leads to Negotiated Settlement
Following mediation that began August 13, 2025, in Atlanta, the parties reached a comprehensive settlement embodied in a term sheet executed September 19. Under the proposed plan, the BOR will regain direct control of the student housing facilities while providing certainty to creditors and ensuring continuity of operations for students.
The transaction includes several key components beyond the $208.5 million asset purchase. Corvias Group, the debtor's ultimate parent company, will pay an additional $18 million settlement to the BOR. The state entity will also receive $809,060 to settle prepetition utility obligations.
"Over the coming months, the Debtor, the BOR and campus representatives will work to ensure that operations remain unchanged through year-end, followed by a seamless management transition back to the BOR," according to the filing.
Creditor Classes and Recovery Projections
The plan establishes six classes of claims and interests, with varying recovery prospects. Administrative claims, professional fees, and tax claims will be paid in full. The largest creditor group—holders of the secured notes—will receive their pro rata share of the $205 million noteholder distribution plus additional available cash.
General unsecured creditors, estimated at approximately $5.2 million in trade payables as of the petition date, will share in a recovery fund of $3 million after payment of administrative expenses and other priority claims. Subordinated claims and equity interests will receive no recovery.
The plan requires approval from impaired creditor classes, with a confirmation hearing scheduled for December 11, 2025. The target effective date is January 2, 2026, following completion of the fall 2025 semester.
Broader Context for Public-Private Partnerships
The Corvias bankruptcy highlights challenges facing public-private partnerships in higher education, particularly those structured during more optimistic enrollment projections. The COVID-19 pandemic accelerated existing trends of declining enrollment and increased financial pressure on auxiliary services like student housing.
The case involves major Georgia institutions including Georgia Southern University, Augusta University, Georgia State University, and the University of North Georgia, among others. The seamless transition back to state control appears designed to minimize disruption to students and university operations.
Stephen Gray will serve as independent manager to oversee the post-effective date wind-down of the estate and distribution of remaining funds to creditors. The debtor's chapter 11 case will remain open until all claims are resolved and final distributions are made.
The plan includes broad releases protecting various parties involved in the restructuring, though creditors may opt out of certain third-party releases. The BOR's acquisition of the assets free and clear of liens will be protected under Section 363(m) of the Bankruptcy Code as a good faith purchase.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 86 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.