Judge Lifts Bankruptcy Freeze on Camp Mystic Wrongful Death Suits

Judge Lifts Bankruptcy Freeze on Camp Mystic Wrongful Death Suits

Ruling lands at the end of a nearly 12-hour hearing

U.S. Bankruptcy Judge Christopher M. Lopez ruled Friday that wrongful death lawsuits against Camp Mystic may resume on Nov. 9, lifting the automatic stay that halted the claims after the camp's owners filed for Chapter 11 bankruptcy protection in June. Lopez, of the U.S. Bankruptcy Court for the Southern District of Texas, issued the decision at the close of a hearing in Houston that ran nearly 12 hours, Bloomberg Law reported. Beginning Nov. 9, the bankruptcy protections shielding the camp and the family that owns it give way. Lopez said the civil cases still have to be litigated to resolve what he called the "central issue" at the heart of the Chapter 11 proceedings.

The bankruptcy petition arrived after families sued in Austin

Camp Mystic and three related businesses sought Chapter 11 protection in June 2026, after more than a dozen families had filed five wrongful death and survival actions in Travis County. The filing automatically stayed those cases. The suits had been playing out in Austin before being moved from a Travis County district court into federal court shortly after the petition, KERA reported. Motions are pending to transfer them to the Southern District or send them back to Travis County, so the trial forum is still unsettled.

What happened in the early hours of July 4, 2025

The claims arise from the flood that struck in the early morning hours of July 4, 2025, when historic rainfall turned the Guadalupe River into a torrent across Texas Hill Country and swept through the century-old camp. Twenty-five campers and two counselors died at Camp Mystic, a toll the families have named "Heaven's 27," according to KXAN. Some accounts put the camp's dead at 28 because camp owner Richard Eastland also died in the water. The wider disaster killed more than 130 people across Texas, People reported.

Families say camp leaders failed to get the girls out

The civil complaints accuse camp leadership of gross negligence and wrongful death, alleging that operators failed to evacuate campers and counselors as floodwaters rose. An earlier petition sought more than $1 million in damages, ABC reported. Attorney Paul Yetter said at the time that "Camp Mystic failed at its primary job to keep its campers and counselors safe, and young girls died as a result."

Camp counsel called it a tragedy that cannot be undone

Camp Mystic bankruptcy attorney Deirdre Brown opened Friday's argument by acknowledging the victims' families in the courtroom. "The July 4th flood was a tragedy and it cannot be undone," Brown said, according to The Dallas Morning News. "There's no comparing the trauma. For 100 years, Camp Mystic was a cherished place where girls found friends for life." She also flagged the split among the families: "The people in this room share a loss. They do not all agree on what comes next."

Who controls the bankruptcy is still undecided

The camp's creditor committee, made up of 13 families who lost children, has asked Lopez to appoint a Chapter 11 trustee, arguing that wrongful death claims against the Eastlands make it impossible for them to run the estate. The U.S. Trustee's office has asked for a trustee or, failing that, conversion to a Chapter 7 liquidation that would sell off the assets. The Eastlands counter with their own slate: Mark Andrews as independent manager of Camp Mystic LLC and retired bankruptcy judge Craig Gargotta as independent director of Natural Fountains Properties, the entity that owns the land. Under that structure the family would have no vote on the reorganization plan, the property sale or conflict matters. The Eastlands still control the estate and have hired chief restructuring officer Karen Nicolaou. Lopez said he hopes to decide who runs the case by Oct. 19, with another hearing set for Oct. 13.

The balance sheet looks thin against the claims

Court filings list roughly $20 million in assets across the four debtors, most of it the property itself. Monthly reports showed about $4.8 million in combined cash at the end of July, according to an analysis of the schedules by chapter11cases.com. Six insurance policies are disclosed, including a general liability policy and an excess policy with a $5 million limit. The camp's own filing said the families' demands exceed the available insurance and assets "many times over," which is why the owners sought bankruptcy protection.

A 749-acre auction is already on the table

On Sept. 25, the debtors filed a plan to sell virtually all of Camp Mystic's assets through a court-supervised auction, including roughly 749 acres near Hunt along the Guadalupe River. Proceeds would sit in escrow and be distributed by bankruptcy priority, and the Eastland family's ownership stake would be canceled if the sale goes through. A group backed by camp families and former campers is expected to submit the first bid, though no price has been disclosed.

A criminal investigation runs alongside the civil cases

The Texas Rangers have told a Kerr County court they believe Camp Mystic committed crimes including manslaughter, criminally negligent homicide, injury to a child, abandoning and endangering a child, and deadly conduct, according to a search warrant affidavit reported by The Texas Tribune. No charges have been filed. Rangers seized devices belonging to Eastland family members from a Denton storage unit, and the warrants cover 14 people, seven of them family members. The family has moved to block review of the iCloud data.

Three dates now frame the case

An Oct. 13 hearing takes up control of the estate, Lopez wants to rule on that question by Oct. 19, and Nov. 9 is when the stay lifts and the families can press their claims in court. Whether the pause also shields individual Eastland family members is a separate question the bankruptcy court is still weighing, KPRC reported.