Five months into its chapter 11 case, Integrity Investment REO Holdings LLC has filed no plan of reorganization, no debtor-in-possession financing motion, and no request to use cash collateral. Its most recent operating report shows the case's only sign of financial activity to date: a single $5,924 deposit that landed in a newly opened debtor-in-possession bank account in early June, the first money the debtor has reported moving since the case began.
The Chicago-based limited liability company, which buys delinquent property-tax certificates at county tax sales, filed chapter 11 on January 29, 2026 in the U.S. Bankruptcy Court for the Northern District of Illinois, Case No. 26-01589. The filing came the same morning senior secured lender Byline Bank was set to argue in state court for appointment of a receiver over the debtor's assets.
U.S. Bankruptcy Court, Northern District of Illinois (Eastern Division — Chicago)
Case Number
26-01589
Petition Date
January 29, 2026
Judge
Hon. Deborah L. Thorne
Claims Agent
Stretto, Inc.
General Bar Date
June 18, 2026
Governmental Bar Date
July 28, 2026
Case Snapshot
Filed to Block a Receivership Hearing
Integrity Investment REO Holdings, an Illinois LLC organized in 2019, purchases delinquent real estate taxes at public tax sales — concentrated in Cook County, with additional purchases elsewhere in Illinois and in a handful of other states; the company registered as a foreign limited liability company in Iowa in 2021, consistent with tax-certificate purchasing that reached beyond Illinois. When it wins a tax sale, the debtor receives a tax certificate evidencing the underlying lien, which it then prosecutes toward a tax deed on the property. The debtor's three managers — Lynda Segneri, Thomas Costello, and Sarah Rothman Robins — run the business from a Chicago office at 201 W. Lake St.
The bankruptcy followed a specific trigger, not a negotiated restructuring. Byline Bank's revolving loan to the debtor matured on November 5, 2025 and went unpaid, leaving roughly $11.4 million outstanding. Byline moved in state court to have a receiver appointed over the debtor's assets, and the chapter 11 petition was filed the same morning that motion was scheduled for hearing, staying the receivership action under the automatic stay.
The debtor's own financial disclosures corroborate a business already winding down before the petition. It reported negative gross revenue of $66,786.41 in 2025, down from $214,952.09 in 2024, and its operating account at Byline was closed on December 3, 2025 — nearly two months before the filing.
A Tax-Lien Portfolio Against a $24.7 Million Deficit
The debtor's own accounting shows a lopsided balance sheet. Its Summary of Assets and Liabilities reports total assets of $1,604,480 — $1,474,480 in real property and $130,000 in personal property — against total liabilities of $26,339,821.77, including $24,697,940.10 in secured claims and $1,641,881.67 in non-priority unsecured claims. No priority unsecured claims are scheduled.
The real property consists of twelve scattered-site Illinois residential parcels held in fee simple or through indemnity-flip interests tied to tax certificates, listed in the debtor's schedules at the following values:
Address
Schedule Value
15029 Harding Ave, Midlothian
$165,000
9231 S Francisco Ave, Evergreen Park
$150,000
224 Oniel, Joliet
$78,000
524 Pontiac St, Joliet
$205,000
221 E Center St, Leroy
$189,000
452 Clark St
$95,000
1922 N Hickory St, Crest Hill
$250,000
307 School, Lena
$222,000
4967 W Cardinal Ct, Monee
$55,760
712 Pine Ave, Freeport
$37,170
324 Moseley, Freeport
$27,550
933 Monroe Dr, Freeport
$0
The debtor reports no machinery, equipment, or vehicles, and its schedules check "No" for executory contracts or unexpired leases, leaving the tax-lien parcels as effectively the entire operating asset base against Byline's $11.4 million secured claim and the additional secured mortgages held by insider Steven Rothman. The debtor has also completed ordinary-course residential dispositions beyond the scheduled holdings, including an $85,000 sale of a Zion, Illinois parcel, illustrating the small-value per-property sales through which the tax-deed portfolio is monetized.
The debtor's later monthly operating reports carry a different, smaller prepetition secured-debt figure — $13,381,658, versus $24.7 million in the original schedules — because the March 2026 operating report narrows the working balance to core prepetition obligations rather than the full universe of scheduled secured claims, including the Rothman mortgages and codebtor-related listings.
One asset outside the tax-lien portfolio is a pending federal lawsuit. The debtor is a plaintiff in an amended complaint against Illinois Attorney General Kwame Raoul and most Illinois counties in the U.S. District Court for the Southern District of Illinois, challenging the constitutionality of the Illinois Property Tax Code. Preserving that claim was cited as part of the reason the debtor later retained specialized restructuring co-counsel.
Insider Payments to the Rothman Family
The debtor's ownership and secured-creditor rolls overlap. Manager Sarah Rothman Robins holds a 50% interest in the debtor, alongside Lynda Segneri and Thomas Costello at 25% each, while Steven Rothman — a relative of Robins — is listed as a secured creditor on multiple parcels alongside Byline Bank.
In the year before the petition, the debtor made two mortgage payoffs to Rothman: $244,010.11 for the 527 N. Lyle property on October 17, 2025, and $71,080.01 for the 8250 S. Kenwood property on December 12, 2025, together with roughly $12,000 in interest payments to Rothman between 2022 and 2025. Lynda W. Rothman and Steven I. Rothman later appeared in the case through separate counsel, filing a notice of appearance in March 2026.
No DIP, No Cash Collateral, and a Single $5,924 Deposit
Unlike most chapter 11 filings, Integrity Investment REO Holdings has never sought debtor-in-possession financing or authority to use cash collateral. Debtor's counsel represented to Byline that the company is not operating and therefore is not using Byline's collateral, and Byline asked the court to require that representation be memorialized in an order if the debtor's schedule deadline were extended.
The debtor's monthly operating reports through April 2026 bear that out: the March 2026 report and the April 2026 report each show $0 beginning and ending cash, $0 receipts, $0 disbursements, and $0 professional fees paid or approved for the month.
The May 2026 operating report marks the first change. The debtor opened a new debtor-in-possession bank account on June 2, 2026 — addressing an early Byline complaint that no such account existed — and received a single $5,924 deposit on June 5, 2026, producing a $5,924 ending balance against a $0 beginning balance. The report does not explain the source of the deposit, and disbursements and professional fees remained at $0 for the month.
Byline's Objection and the Fight Over Weissberg & Khanna
Byline Bank has been the case's most active adversary. When the debtor asked to extend its schedule-filing deadline in February 2026, Byline objected, arguing that the debtor had not moved to use cash collateral, had not applied to retain counsel, and had not established a debtor-in-possession account. Byline also warned that certain tax certificates securing its loan were at risk of expiring and becoming worthless as early as February 28, 2026 under applicable tolling orders, and asked the court to condition any extension on immediate turnover of the original tax certificates with a sworn accounting of expiration deadlines. The court granted the schedule extension over Byline's objection.
Retention of counsel proceeded unevenly. The court approved Bach Law Offices as lead counsel effective as of the petition date at hourly rates of $425 for both Paul M. Bach and Penelope N. Bach, drawing on a $7,500 prepetition retainer. Adding restructuring co-counsel took much longer: the debtor's application to employ Weissberg & Khanna, Ltd. — whose proposed scope covers cash collateral, sale of real and personal property, DIP financing, adversary proceedings, and the pending federal litigation — drew a U.S. Trustee objection in mid-April 2026. The employment hearing was continued four times before the court approved the application in mid-May 2026, after the debtor filed a supplemental declaration from manager Thomas Costello and an amended affidavit from Weissberg & Khanna's Ariel Weissberg.
Claims Agent, Bar Dates, and No Plan on File
The debtor's initial petition listed fewer than twenty creditors, but its schedules revealed a far larger universe: between 4,000 and 5,000 creditors, largely the counterparties and prior owners tied to the debtor's tax-certificate purchases. That gap drove the motion to retain Stretto, Inc. as claims and noticing agent, which the court approved effective as of the petition date. Stretto is compensated administratively under its engagement agreement, cannot stop service for nonpayment without a court order, and is not indemnified for gross negligence, willful misconduct, fraud, bad faith, self-dealing, or breach of fiduciary duty.
The court's order setting bar dates established June 18, 2026 as the general claims bar date and July 28, 2026 as the governmental claims bar date. The general bar date has now passed, though no resulting claims-register activity or omnibus claims objections appear on the docket yet.
No disclosure statement, plan of reorganization, sale motion, or valuation analysis has been filed. Weissberg & Khanna's retention scope contemplates a future sale of the debtor's real and personal property and eventual plan and disclosure-statement work, but as of the May 2026 operating report, no transactional papers had been filed to advance either path.
Key Timeline
Date
Event
Aug 26, 2021
Debtor and affiliates borrow $17.5 million from Byline Bank under a revolving note secured by tax certificates
Oct 17, 2025
$244,010.11 mortgage payoff to insider Steven Rothman
Nov 5, 2025
Byline Bank revolving loan matures and remains unpaid
Dec 3, 2025
Debtor's Byline operating account is closed
Dec 12, 2025
$71,080.01 mortgage payoff to insider Steven Rothman
Jan 29, 2026
Chapter 11 petition filed the morning of Byline's state-court receivership hearing
Feb 16, 2026
Debtor files Schedules D, E, and F
Feb 23, 2026
Byline Bank objects to the schedule-extension motion
Feb 24, 2026
Debtor files remaining schedules, Statement of Financial Affairs, and list of equity holders
Feb 25, 2026
Court grants schedule extension over Byline's objection; debtor moves to set a bar date
Mar 11, 2026
Court approves Bach Law Offices as lead counsel, effective as of the petition date
Mar 20, 2026
Debtor moves to appoint Stretto as claims agent, citing roughly 4,500 creditors
Mar 25, 2026
Court sets bar dates and approves Stretto's retention
Apr 14, 2026
Debtor applies to employ Weissberg & Khanna as co-counsel
Apr 17, 2026
U.S. Trustee objects to the Weissberg & Khanna employment application
May 13, 2026
Court approves Weissberg & Khanna's employment after four continuances
Jun 2, 2026
Debtor opens its first debtor-in-possession bank account
Jun 5, 2026
$5,924 deposit posts to the new account — the case's first reported cash movement
Jun 18, 2026
General claims bar date
Frequently Asked Questions
Why did Integrity Investment REO Holdings file for chapter 11?
The company filed on the same morning that Byline Bank, its senior secured lender, was set to argue in state court for appointment of a receiver over the debtor's assets after Byline's revolving loan matured unpaid in November 2025. The timing indicates a defensive filing to stop the receivership rather than a negotiated restructuring.
Who is the claims agent for Integrity Investment REO Holdings?
Stretto, Inc. serves as claims and noticing agent, effective as of the January 29, 2026 petition date. The retention was driven by the debtor's creditor matrix expanding to between 4,000 and 5,000 names once its schedules were filed, far more than the fewer-than-twenty creditors listed on the original petition.
What is the claims bar date in this case?
The general bar date for filing proofs of claim was June 18, 2026, and the bar date for governmental units is July 28, 2026, both set by court order in March 2026.
Has Integrity Investment REO Holdings filed a chapter 11 plan?
No. As of the debtor's most recent operating report, no disclosure statement, plan of reorganization, sale motion, or valuation analysis had been filed.
Does the debtor have debtor-in-possession financing?
No. The debtor has not sought DIP financing or authority to use cash collateral, and its operating reports showed $0 cash for the first three months of the case before a single $5,924 deposit appeared in a newly opened account in June 2026.
More chapter 11 case coverage is available on the ElevenFlo blog.
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. Read our full disclaimer.
