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What Happened to Inspired Healthcare Capital's DSTs? Chapter 11

By Jorge··24 min read

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Quick Answer

Inspired Healthcare Capital's Delaware statutory trusts (DSTs) are themselves Chapter 11 debtors, not bystanders. Inspired Healthcare Capital Holdings, LLC and its affiliates, 161 debtors in all, filed on February 2, 2026 in the Northern District of Texas (No. 26-90004). The sponsor's restructuring officer swore that the company raised more than $1.2 billion from 3,300 fund investors, 2,300 DST investors and 200 development investors, that only 8 of its 31 DST communities ran without a cash subsidy from the sponsor, and that about $59 million of fees owed by the DSTs was unpaid. SEC Form Ds list 33 DSTs offering $906.3 million, but only $58.2 million sold when those forms were filed (our sums), so Form D understates the raise. Eleven court orders on October 13, 2026 approved the sale of 30 properties (reported price: $713 million); how the proceeds are split is still being fought over, and the docket we read shows no Chapter 11 plan. The general deadline to file a claim was August 14, 2026; the creditors' committee asked to move it to August 21, 2026. As of October 19, 2026.

Key Takeaways

  • The DSTs are debtors. The first-day declaration says each community is held by an individual DST or LLC, and the DST entities are among the 161 debtors. A DST interest is not a share in a company that owns a building and sits outside the case; the trust that holds the building is in Chapter 11 with the sponsor.
  • Form D census (our sums from each issuer's latest filing): 33 DSTs, October 2020 to July 2025, $906,250,469 offered, $58,208,891 sold when the forms were filed (6.4%), 173 investors reported at filing, 18 of the 33 with $0 sold. Estimated sales commissions $80.4 million, a median 9.0% of each offering.
  • From the sworn declaration: of 31 DST communities only 8 operated without direct cash subsidy from the sponsor; the sponsor put about $86 million into 23 master tenants; accrued unpaid fees across all DSTs were about $59 million; and 13 DSTs carry third-party mortgage debt (aggregate funded debt about $260 million across 15 debtors), while the other DSTs have none.
  • Sale: eleven orders approving the sale of 30 properties were entered on October 13, 2026. Third-party reports put the price at $713 million; eleven contract prices from a case tracker add to $713.5 million (our arithmetic). That is a gross price. Secured lenders, fees and the allocation among DSTs come first, and the allocation is the open fight.
  • Claims: a court-approved master proof of claim covers unsecured claims, beneficial trust interests and equity interests; filing in good faith is deemed to assert contingent claims against every other debtor. The bar date has passed (August 14, 2026, with an August 21, 2026 extension requested), so a late filer needs the court's permission.
  • A separate Official Committee of DST Investors was appointed on May 14, 2026. On October 13, 2026 the court awarded fees of $944,005.00 for its professionals' first interim period.

CSV · 260 rows

Inspired Healthcare Capital DSTs: Form D census, first-day declaration figures and the Chapter 11 docket calendar, 2020-2026

260 rows: 33 DST Form Ds with offering, sold, investors and commissions, ten sponsor fund Form Ds, the sworn first-day figures, the 13 levered DSTs and their lenders, the claims process and the docket calendar to October 13, 2026.

What a DST interest is in this case

If you bought an “Inspired Senior Living of ... DST” interest through a broker for a 1031 exchange, you bought a beneficial interest in a trust, not shares of the sponsor. Our DST guide explains why the trust is frozen by design under Rev. Rul. 2004-86. The sponsor's sworn declaration shows how that frozen structure was wired at Inspired:

EntityRole, per the first-day declarationWho controls it
The DST (one per community)Legal owner of the real estate. “Structured to attract DST Investors seeking a Section 1031 Exchange.” DST investors hold beneficial interests.Managed by a Signatory Trustee
Signatory TrusteeAn LLC that acts as trustee and manager of the DST and receives a fee from it that is “ultimately remitted to Holdings”Wholly owned by Inspired Healthcare Capital Holdings, LLC; its independent manager since January 30, 2026 is Trinity River Advisors, LLC
Master TenantLeases the building from the DST, holds the state operating licenses, contracts with residents and pays the DST “Stated Rent” by formula; excess cash goes to HoldingsWholly owned by Holdings
Delaware TrusteeRequired by Delaware's DST Act; the declaration says it has “no role in the DSTs' management”A Delaware trustee, in addition to the signatory trustee
Third-party managerRuns day-to-day operations of each community for the master tenantOutside company
Holdings and the Debtor Sponsor (Inspired Healthcare Capital, LLC)Parent of the signatory trustees and master tenants; the sponsor charges the DSTs a monthly “Reallocation Fee” for overheadIndependent managers: CRS Capstone Partners LLC for Holdings and the sponsor

Two points matter for a holder. First, the master tenant, which pays the DST's rent, belongs to the same parent as the trustee that manages the DST; the filing describes the master tenants as acting as a clearinghouse or conduit for cash between the community, the DST and Holdings. Second, the declaration says the company owns “minimal DST Interests in 27 DSTs”, and that the other DSTs were fully subscribed so it holds no interest in them.

What the filings say about the money inside the DSTs

The declaration is the one document in which the sponsor describes the DSTs' economics under oath. Its main figures:

ItemFigureWhere it comes from
Capital raised since inceptionMore than $1.2 billion in cash from 3,300 fund investors, 2,300 DST investors and 200 development investorsDeclaration, paragraph 3. “An investor is counted for each investment vehicle in which it invested”, so the counts are not 5,800 separate people
Investment funds aloneOver $390 million, generally lent to the sponsorDeclaration, paragraph 3
DST communities that covered their own obligations8 of 31 “operated without direct cash subsidy from the Debtor Sponsor”Declaration, paragraph 4
Sponsor money moved to master tenantsAbout $86 million to 23 master tenants to cover shortfalls and fund debt service and investor distributionsDeclaration, paragraph 59
Reallocation Fees owed by the DSTs to the sponsor$40,000 to $50,000 a month per DST, mostly accrued rather than collected; about $59 million accrued and unpaid across all DSTs on February 2, 2026Declaration, paragraph 44
Third-party mortgage debtAbout $260 million in 15 loan agreements with ten lenders; the table of 15 debtors totals $258,804,259Declaration, paragraph 50
Broker-dealer pay“More than $100 million in commissions and fees”; Emerson Equity, LLC was managing broker-dealer on 29 of the DSTs and all the investment fundsDeclaration, paragraph 58
Debt-free DSTs“No other DST Debtors have any outstanding funded-debt obligations” beyond the 15 listed debtorsDeclaration, paragraph 52

The declaration also explains why distributions came from somewhere other than the buildings. The trust agreements require the Reallocation Fees, trustee fees and debt service to be paid before investor distributions, and the declaration states: “Despite Communities generating insufficient NOI to pay the Master Stated Rent, the Master Tenants continued to pay Master Stated Rent.” The sponsor funded the gap from investment-fund money and other sources. The restructuring officer adds that his team's preliminary analysis found that “not all these funds were used for their intended purposes or benefited the Company.” That is a sworn statement by the debtors' officer in a first-day filing, not a court finding.

Thirteen DSTs have mortgage lenders named in the declaration's debt table: Delray Beach (Comerica Bank); Dunedin, Candle Light Cove, Hamilton and North Haven (Provident Bank); Fort Myers (Stride Bank); Brookhaven, Melbourne and Reno (Synovus); Grapevine (Texas Security Bank); Eugene (HPI Fairmount Lender, LP); St. Petersburg (Webster Bank); and Augusta (Integrity Life Insurance Company). That is 13 of 31 DST communities (our count); a lender with a first lien is paid from a property's sale before the trust's investors.

The SEC Form D census: what the SEC record shows and what it does not

Searching EDGAR for issuers named “Inspired Senior Living of ... DST” and “IHC - ... DST” finds 33 DSTs, the first signed October 20, 2020 (IHC - Ashbrook DST) and the last July 8, 2025 (Inspired Senior Living of Beaverton DST). Our DST guide counts 32 filed from March 2021; adding the October 2020 Ashbrook DST makes 33. By signature year (latest filing per issuer, our sums):

Year of Form DDSTsOffering amount listedSold when filedShare sold
20201$17,726,474$383,0002.2%
20217$166,035,339$16,121,0249.7%
202215$408,039,820$31,565,6057.7%
20236$166,743,837$00.0%
20241$43,708,696$00.0%
20253$103,996,303$10,139,2629.8%
All 33 DSTs33$906,250,469$58,208,8916.4%

The largest by offering amount:

DST (issuer)Form D signedOffering amountSold when filedInvestorsEst. commissions
Inspired Senior Living of Hamilton DSTMay 10, 2022$56,806,924$11,679,08835$5,112,622 (9.0%)
Inspired Senior Living of Naperville DSTMar 18, 2022$49,216,474$7,297,40825$4,429,483 (9.0%)
Inspired Senior Living of Cinnaminson DSTJun 16, 2025$46,630,263$1,712,04110$4,196,723 (9.0%)
Inspired Senior Living of New Braunfels DST, LLCMar 5, 2024$43,708,696$00$3,933,783 (9.0%)
Inspired Senior Living of Athens DSTJul 30, 2021$38,063,343$1,360,5743$3,806,333 (10.0%)
Inspired Senior Living of Beaverton DSTJul 8, 2025$37,973,742$1,408,5117$3,417,636 (9.0%)
IHC - Candle Light Cove DSTJul 22, 2021$32,748,352$6,435,07925$1,817,020 (5.5%)
Inspired Senior Living of San Marcos DSTDec 4, 2023$30,992,485$00$2,789,324 (9.0%)

Read these with three cautions. “Sold” is what had been sold when the form was filed, usually days after the first sale, and almost none was ever amended; Hamilton's $11.7 million is a snapshot, not its final raise. Eighteen of the 33 forms report $0 sold because they were filed before any sale. And the offering amount is a ceiling the sponsor set, not the equity the trust raised. The declaration's figure, more than $1.2 billion from all investors, less “over $390 million” raised by the funds, leaves roughly $0.8 billion for DST and development investors (our arithmetic, which assumes the two are not double counted). The Form D record therefore cannot tell you what your own DST raised; your subscription documents can.

The Form Ds are also the only place the sales load is visible. The 33 forms estimate commissions of $80.4 million, 8.9% of everything offered, with a median of 9.0% (our arithmetic). The Beaverton form itemizes “Selling commissions of $2,278,425 + Dealer Management Fee of $379,737 + DD Allowance of $379,737 + Wholesaling Fee of $379,737”, as our DST fee analysis shows for the whole market. Emerson Equity is the broker-dealer listed on 31 of the 33 forms (our count) and American Alternative Capital, LLC on the other two (Augusta and Fort Myers).

The sponsor also filed Form Ds for ten fund vehicles, which are not DSTs and rank differently in the case: Inspired Healthcare Capital Fund LP ($30 million offered, $9.5 million sold at its May 2020 amendment), four Income Funds, a Notes fund ($6 million offered, $5.07 million sold), a Liquidity Fund, two IHC Development Funds and the IHC Security Income Fund. The last of these 43 issuers to file anything with the SEC did so on July 8, 2025 (the Beaverton DST), so an SEC-filing alert cannot follow this case; the court docket is where it moves.

## The case calendar, from the docket

The lead docket is In re Inspired Healthcare Capital Holdings, LLC, No. 26-90004 (Bankr. N.D. Tex., Fort Worth Division), jointly administered with the DSTs, the sponsor's funds and their affiliates; related filings carry numbers such as 26-90142 (Inspired Healthcare Capital Fund LP) and 26-90152 (Inspired Healthcare Capital Income Fund LLC). The court's claims agent is Epiq Corporate Restructuring, LLC. Dates below are from the docket entries and the orders we read; “Doc” is the docket entry number.

DateEventSource
April 30, 2025SEC formal investigation opened; investor distributions stopped (the declaration dates the halt to July 2025 in the text and June 2025 in a footnote); debt service suspended October 2025Declaration (Doc 33), paragraphs 7 and 63
February 2, 2026Holdings and each debtor affiliate file Chapter 11 petitions: 161 debtorsDoc 1; Doc 33
February 25, 2026U.S. Trustee appoints the Official Committee of Unsecured CreditorsDoc 1388, paragraph 8
March 24, 2026Final orders on postpetition (DIP) financing and cash collateral; the declaration sized the DIP at $35 millionDoc 339; Doc 33
April 13, 2026Order establishing bid procedures for the sale of the propertiesDoc 1916
April 14, 2026Bar date notice: general bar date June 15, 2026; governmental bar date August 3, 2026Doc 1388, paragraphs 9 and 10
May 14, 2026U.S. Trustee appoints the Official Committee of Delaware Statutory Trust (DST) InvestorsDoc 633
June 3, 2026Court authorizes the DST Committee to communicate with DST investorsDoc 757
June 4, 2026Order moves the general bar date to August 14, 2026 and approves a master proof of claim covering beneficial trust interestsDoc 771
August 14 to 18, 2026Committee moves, with the debtors' consent, to extend the bar date to August 21, 2026; hearing held August 18Doc 1388; Doc 1428
August 26, 2026First sale order: Salterra at Hanover (Minnesota), a non-DST propertyDoc 1497
September 29, 2026Sale hearing begins; evidentiary record closed; closing arguments set for October 5, 2026Doc 1833
October 5, 2026Closing arguments; Law360 reports the judge approves the sale of 30 communities for $713 million and defers objections over the division of proceedsDocs 1833 and 1935; Law360 headline
October 13, 2026Eleven written orders approving the sales entered; sealed stipulations among the debtors, three lenders, both committees; DST Committee's first interim fees of $944,005.00 awardedDocs 1970 to 1979 and 1981; Docs 1985 to 1987; Doc 1989
October 14, 2026Hearing on lender objections to the notices of final sale ordersDoc 1999
October 20, 2026Hearing on the creditors' committee's Rule 2004 discovery motions (requests for documents from the debtors and from their tax and auditing professionals)Doc 1997
November 17, 2026Hearings on a lender's motion to compel post-petition interest and a stay-relief motionDocs 1992 and 1993

The sale of 30 properties: what is approved and what is not

The orders entered on October 13, 2026 approve sales of 30 properties: 29 communities and a vacant parcel in Augusta. Matching the property cities in the order titles to the DST names (our matching; DST names and community brands differ), 29 of the 33 DSTs with a Form D have their property in an approved sale. The four that do not appear in any order title are Peachtree, St. Petersburg, Cinnaminson and Beaverton. The prices below are not in the orders we could read; they come from a third-party case tracker's summary of the debtors' September notices of successful bidder (Docket Nos. 1566 to 1579, which we could not open):

Order (Doc)Properties in the order titleDSTs matched by cityBuyer and contract price, per tracker
1970Equity in IHC Ashbrook MT, LLC and assets of IHC Ashbrook DSTAshbrookAlliance, $5,600,000
1971Mariella of Reno, Thrive at Augusta, Augusta vacant landReno, AugustaAREP HC Fund III Investments, LLC, $67,533,753
1972Azalea at Delray Beach and five Salterra communities (Dunedin, Fort Myers, Melbourne, Largo, Pinellas Park)Six DSTsInspired Florida, $82,000,000
1973Salterra at Las Vegas, The Archer at Crescent Park (Eugene), Mariella of GrapevineLas Vegas, Eugene, GrapevineSonida Acquisition, $73,410,000
1974Arbor Terrace Naperville, The Landing of North Haven, Azalea at HamiltonNaperville, North Haven, HamiltonWelltower OP, $197,150,000
1975Salterra at Chesterfield, Mariella of Lake OrionChesterfield, Lake OrionConscious, $15,400,000
1976Teal Shores (Mequon), Ballard Glenn (Appleton)Mequon, AppletonAG2 Acquisitions, $37,200,000
1977Salterra at Carson Valley (Gardnerville)Carson ValleyPHosh, $8,415,000
1978Residence at Cedar Dell (Dartmouth), Candle Light Cove (Easton), Blake at New Braunfels, Mariella of Sage Spring (San Marcos), Mariella of Teravista (Round Rock)Dartmouth, Candle Light Cove, New Braunfels, San Marcos, Round RockNHP OP, $147,197,700
1979Orchard at Brookhaven, Orchard at Athens, Mariella of Arlington HeightsBrookhaven, Athens, Arlington HeightsPO Holdco, $68,726,921
1981Inspired Senior Living of EatontonEatontonPHosh (Harbor at Harmony Crossing), $10,834,450 (matched to Eatonton by elimination, our reading)
Total30 properties29 DSTs$713,467,824 (our arithmetic on the tracker's eleven figures)

The eleven tracker prices add to $713,467,824 (our arithmetic), which agrees with the “$713 million for 30” that Law360 and InvestmentNews report, so the reported price is the sum of the contracts. Four things the number does not tell you:

  • It is a gross price, not a distribution. The tracker lists contract prices only; the declaration shows 13 DSTs with first-lien mortgages (about $260 million of debt across the 15 levered debtors), and sale costs, professional fees, reserves and lender claims such as post-period interest come before any trust investor. One lender has a motion to compel post-petition interest set for November 17, 2026.
  • The allocation among DSTs is the open fight. The docket shows lenders objecting to the notices of final sale orders, a hearing on those objections on October 14, 2026 and sealed stipulations filed October 13 between the debtors, UMB Bank, Integrity Life Insurance Company, Provident Bank, the creditors' committee and the DST Committee. InvestmentNews reports that “there are still disputes over how the proceeds will be divided” (a plaintiff-side attorney's words) and that the judge left them for later.
  • “59% of $1.2 billion” is not a DST recovery rate. InvestmentNews divides $713 million by the $1.2 billion that advisors sold; the declaration says over $390 million of the $1.2 billion went into the funds, and the $713 million covers only the properties in these orders. The comparison mixes unlike things.
  • A sale order is not a closing. The orders authorize sales; payment, release of the lenders' liens and distribution come later. The first sale order, for Salterra at Hanover (Minnesota, not a DST) on August 26, 2026 (Doc 1497), came more than six weeks before these.

What the record does not show

  • A Chapter 11 plan. The docket entries we read (the 204 most recent, October 5 to 19, 2026, plus a search of the case's documents for “Disclosure Statement”) contain no plan or disclosure statement; the matches are first-day motions from February and March 2026. A motion to further extend the debtors' exclusive periods to file a plan was set for a continued hearing (notice of October 8, 2026, Doc 1909). A DST holder will vote, if at all, on a plan that has not been filed.
  • What any DST investor will receive. No document we could read allocates sale proceeds to a DST or states a recovery percentage.
  • The August 2026 bar-date order. We have the motion for an extension to August 21, 2026 (Doc 1388) and the entry showing a hearing on August 18, 2026 (Doc 1428), not the order. The date in force is August 14 or August 21, 2026. Both have passed.
  • The sealed stipulations of October 13, 2026, which are the documents most likely to say how proceeds move.
  • Fraud findings. The sponsor's officer swore to a preliminary view that funds were not used for their intended purposes. The SEC investigation opened April 30, 2025 per the declaration; a web search turned up no SEC complaint or litigation release against the company, which is not proof that none exists, so check SEC.gov. Law-firm pages that allege misrepresentation by selling firms are advocates' allegations, not findings.

What a DST holder can do with this

  • Find your DST in the dataset. Search the CSV for your trust's name to see its Form D: offering amount, what had been sold when it was filed, the commission estimate and the accession number. Then find your property in the sale table above; DSTs are named for cities, communities carry brand names.
  • Check whether a claim was filed for you. The bar-date order required the claims agent to email a confirmation of receipt for online filings, to confirm mailed filings and to confirm uploaded PDFs. The claim form the court approved says it is “only to be used for unsecured claims, beneficial trust interests, and equity interests”, and a claimant who files in good faith is “deemed to have asserted contingent, unliquidated claims against every other Debtor”. Look for that confirmation. The claims agent's site is dm.epiq11.com/case/ihcare/info.
  • If you did not file, see a bankruptcy lawyer now. The deadlines have passed. The docket shows the court entering an unopposed order on October 13, 2026 allowing certain late claims as timely filed (Doc 1990), which shows late claims are handled by motion; it is not a rule that yours will be allowed.
  • Know your committee. The Official Committee of DST Investors was appointed May 14, 2026 and the court authorized it on June 3, 2026 to communicate with DST investors. Its co-counsel include Kane Russell Coleman Logan PC and Holland & Knight LLP and its financial advisor is Alvarez & Marsal North America; the court awarded $944,005.00 of fees for the first interim period. A case tracker reports that the claims agent's site has a DST-specific tab.
  • Do not sign a release or sell your interest on a phone call. The claim form carries a notice headed “Offers to purchase a claim or interest”, warning that some entities buy claims for less than face value and may contact holders.
  • Keep your selling papers. Subscription documents, the offering memorandum and the broker's suitability paperwork matter for any claim against the selling firm. A law firm's summary reports that a July 24, 2026 injunction halted more than 100 FINRA arbitrations against selling broker-dealers and is scheduled to expire November 21, 2026 unless extended; that is secondary reporting, so check the docket of the debtors' adversary proceeding against Emerson Equity LLC (No. 26-09006) before relying on it. Claims against selling firms have their own deadlines.
  • Ask a CPA how the loss or the sale is taxed, including what happened to your 1031 deferral. Our DST guide covers the structure, and our Nelson Partners page shows how another DST sponsor's failures played out.

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FAQ

Sources, read on October 19, 2026: Declaration in support of chapter 11 petitions and first day pleadings, In re Inspired Healthcare Capital Holdings, LLC, No. 26-90004 (Bankr. N.D. Tex.), Doc 33 (filed February 4, 2026); Order extending the general bar date and approving the master proof of claim, Doc 771 (June 4, 2026); Emergency motion for an agreed order extending the general bar date, Doc 1388 (August 14, 2026); docket entries 1863 to 2066 and search results from the docket on CourtListener (docket 72222161), including Docs 633, 757, 1428, 1497, 1833, 1899 to 1916, 1970 to 1981, 1985 to 1990 and 1997 to 1999; SEC EDGAR Form D and Form D/A filings for 33 Inspired Senior Living and IHC DSTs and ten sponsor funds (for example Inspired Senior Living of Hamilton DST, CIK 1926841, accession 0001926841-22-000001; Inspired Senior Living of Beaverton DST, CIK 2076206, accession 0002076206-25-000001; IHC - Ashbrook DST, CIK 1828797, accession 0001828797-20-000001; the full list with accessions is in the dataset); secondary reports used for the sale price and prices by buyer, each marked as such in the text: Law360 (October 5, 2026 headline and summary), InvestmentNews (October 9, 2026), Bondoro's summary of the debtors' notices of successful bidder, a law firm's blog (iorio.law) for the FINRA injunction dates, and the company's February 2, 2026 press release. Totals, shares, medians and the city matching are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.

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