Insured Advocacy Group Seeks Arbitration Over StopLoss Factoring Claim

StopLoss LLC's chapter 11 case reached a new contested-matter turn in July, when creditor Insured Advocacy Group, LLC asked the bankruptcy court to send its disputed factored-receivables claim to arbitration rather than decide it directly. StopLoss LLC and four affiliated entities filed voluntary chapter 11 petitions on March 5, 2026 in the U.S. Bankruptcy Court for the Southern District of Texas, Case No. 26-90386, before Judge Alfredo R. Perez.

Four and a half months in, the debtors have closed a $2.25 million property sale, drawn on a $5.75 million debtor-in-possession loan, and narrowed — but not fully resolved — a fight over warehouse equipment with the company's former co-owner. The court entered first interim fee orders for debtors' counsel and the company's chief restructuring officer in mid-July, while the debtors' exclusive period to file a chapter 11 plan runs through September 1, 2026, and no plan or disclosure statement has been filed.

Debtor(s)	StopLoss LLC (5 jointly administered entities)
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	26-90386
Judge	Hon. Alfredo R. Perez
Petition Date	March 5, 2026
DIP Facility	$5.75 million multi-draw term loan from Twelve Bridge Capital, LLC and 431 KW, LLC; final order entered May 14, 2026

StopLoss operates as an emergency-response and property-restoration business, handling rapid on-site damage assessment and mitigation work. The chapter 11 cases are jointly administered under lead debtor TM36, LLC, with StopLoss Specialists, LLC, StopLoss, LLC, StopLoss Response Services, LLC, and StopLoss Logistics, LLC as co-debtors.

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Insured Advocacy Group Seeks Arbitration Over StopLoss Factoring Claim

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Command 247 Split and the Renaissance Tower Fallout

StopLoss was founded in 2023 with two 50% members: StopLoss Specialists LLC, whose Florida entity record lists John Lewis and Georgena Lewis as authorized members, and Command 247, LLC, owned by Scott Butaud. The company ran an office, warehouse, and yard at 1048 Forum Drive in Broussard, Louisiana, where equipment was stored between job deployments. Mounting unpaid invoices tied to the Renaissance Tower project forced the debtors to cease operations in mid-2025, leaving significant equipment stranded both at job sites and at the Broussard warehouse.

The ownership relationship deteriorated alongside the business. Command delivered notice on August 18, 2025 that it was withdrawing as a member of StopLoss and its affiliates effective September 18, 2025, then sent a second letter a month later purporting to rescind that withdrawal. On October 20, 2025, 431 KW, LLC, StopLoss, and StopLoss Specialists sued Butaud and Command in Harris County state district court, a case later removed to the Texas Business Court, Eleventh Division. The parties reached a Rule 11 Agreement on January 21, 2026 meant to let StopLoss retrieve its equipment and vehicles from Command's possession, but the debtors say Command restricted pickups to the outdoor yard and withheld computers, paper files, and vehicle titles — the same access dispute that carried directly into the bankruptcy case.

$5.75 Million DIP Facility From Twelve Bridge Capital and 431 KW

The court entered a final order authorizing $5.75 million in secured postpetition financing on May 14, 2026, structured as multi-draw term loans from Twelve Bridge Capital, LLC and 431 KW, LLC. The facility carries a 5.0% commitment fee, a 3.0% funding fee, and a 2.0% exit fee, and the DIP lenders received priming liens and superpriority administrative claims across substantially all prepetition and postpetition estate property, including receivables, equipment, contract rights, and avoidance-action proceeds.

The same final order caps professional carve-outs at $250,000 for the debtors' professionals and $75,000 for committee professionals after a triggering event, plus up to $50,000 for statutory trustee fees under section 726(b). Operating cash disbursements cannot deviate upward by more than 15% cumulatively from the approved budget, tested on a bi-weekly cycle, and the order set a challenge deadline of July 28, 2026 for parties to contest the DIP lenders' prepetition liens.

Prepetition secured debt is only partly disclosed in the reviewed record. The DIP order identifies Recovery Logistics Finance, LLC as holding a first-lien loan against RLF-designated collateral, carved out senior to the DIP liens, and lists $1,586,222.26 owed to 431 KW, LLC under separate convertible loan documents secured by related collateral. TM36, LLC's monthly operating report for the period ended May 31, 2026 lists prepetition secured debt of $9,923,291, identifying TM36 as the primary borrower among the five jointly administered debtors and the other four as guarantors, but the complete funded-debt total across all facilities is not established in the filings reviewed.

Pensacola Property Sale to Blackhawk PCS

The court approved the sale of the Pensacola Property at 3984 Barrancas Avenue to Blackhawk PCS LLC for $2.25 million on May 27, 2026, partially free and clear of liens under section 363(f), with a good-faith-purchaser finding under section 363(m). After credits and prorations — including a $542,000 buyer credit tied to code-enforcement, utility-lien, and remediation issues — the adjusted seller payment came to $1,681,336.96, with net proceeds held as restricted cash pending further court order. The same order assigned claims from the Olinger Parties and set an outside closing deadline of May 29, 2026 at 4:59 p.m. Central time.

Turnover Fight Narrows as Segura Returns Records

The debtors filed a motion for turnover of equipment, vehicles, titles, and records on May 22, 2026, directed at Command 247, Scott Butaud, and former general counsel Lauren Ashley Noel (also identified in later filings as Lauren Ashley Noel Segura). The motion says Command moved equipment in piecemeal batches to the yard for pickup by contractor JMN Enterprise LLC between mid-January and mid-February 2026, never let JMN inside the building, and at one point called local law enforcement to block further access. JMN identified missing items including 59 large dehumidifiers, 18 smaller dehumidifiers, a forklift, a drone, two air-conditioning units, a cargo trailer, and the debtors' computers and office equipment — some of it pledged as collateral to Recovery Logistics Finance, LLC. Command responded with objections on June 12, 2026, disputing the debtors' account and arguing the court lacked jurisdiction over parts of the dispute.

The Noel Segura portion of the motion is now resolved. A stipulation between TM36 and Segura confirms the debtors retrieved a container of legal files, contracts, and pleadings from a Broussard location on June 24, 2026, and that Segura's counsel represented she no longer has access to a cloud system that had held any digital records — with Segura stipulating she has turned over everything requested and the debtors agreeing to seek no further relief against her on that motion.

The Command 247 portion took longer. The parties resolved it through an agreed order entered July 6, 2026 letting the debtors enter the Broussard and Opelousas, Louisiana locations during normal business hours to inspect and remove estate property and paper records, with Command barred from interfering. The order excludes private offices at the Broussard site from the access grant, leaves the underlying ownership and title dispute between the company's two founding members unresolved, and requires any further turnover request to identify specific assets rather than seek blanket relief.

Stay-relief appeal still pending. Separately, Command 247 sought relief from the automatic stay, a request the court denied by opinion and order entered May 4, 2026. Command filed a notice of appeal on May 15, 2026, with Joel W. Reese of Reese Marketos LLC representing Command and Porter Hedges LLP attorneys Aaron J. Power, John "Jack" M. Eiband, and Grecia V. Sarda representing the debtors. The district court clerk docketed the appeal on May 18, 2026; its disposition is not established in the filings reviewed, leaving the stay-relief question open even as the turnover dispute has largely wound down.

IAG's Factored-Claim Fight Heads to Arbitration

The debtors have also moved to cut down a claim from Insured Advocacy Group, LLC (IAG), which stems from an August 16, 2023 factoring agreement under which IAG purchased StopLoss Specialists' invoices on several construction and restoration projects to fund property remediation work. IAG filed Claim No. 9-1 in an unknown amount as a general unsecured claim, and TM36, LLC objected on June 16, 2026, attaching a declaration from chief restructuring officer Pablo Bonjour. The objection argues IAG cannot simultaneously maintain that it owns the receivables outright — blocking the debtors from collecting them — while also asserting a contractual repurchase claim against the estates, and disputes specific factual allegations in IAG's claim, including a contention that the debtors failed to file liens on the Lee Ho and Fortune projects that the debtors say they did file.

IAG pushed back on July 10, 2026 with a response defending its claim and a separate motion to compel arbitration of the entire dispute. IAG points to an August 13, 2024 arbitration addendum to the factoring agreement, covering "any dispute, controversy or claim" arising under it, and argues the addendum is valid under Texas law and reaches the debtors' objection because the underlying claim concerns prepetition contractual repurchase obligations rather than rights created by the Bankruptcy Code. IAG traces the dispute to an AAA arbitration it commenced on August 4, 2025 against StopLoss Specialists and its former owners over the Suburban, Lee Ho, and Fortune accounts — a proceeding an arbitrator found covered the Lee Ho and Fortune claims before it closed when StopLoss Specialists stopped paying arbitration fees, while declining at the time to reach the Suburban account, a ruling IAG now disputes. IAG asks the bankruptcy court to deny the debtors' objection and refer the matter to the American Arbitration Association, while acknowledging that any final determination of what the debtors actually owe would remain subject to the bankruptcy court's authority.

Bar Dates, Exclusivity, and Professional Fee Awards

Kroll Restructuring Administration LLC serves as claims and noticing agent. The bar date order and notice set the general claims bar date at June 8, 2026, 5:00 p.m. Central time, and the governmental claims bar date at September 1, 2026, 5:00 p.m. Central time.

The court extended the debtors' exclusive period to file a chapter 11 plan through September 1, 2026, and their exclusive solicitation period through November 2, 2026, an order that took effect immediately without prejudicing any party's right to seek further relief under section 1121(d). No plan or disclosure statement appears in the record reviewed.

Interim fee awards entered. The court allowed Porter Hedges LLP, debtors' counsel, $341,696.70 in fees and expenses on an interim basis on July 15, 2026, matching in full the firm's first interim fee application covering the petition date through May 31, 2026. The court separately allowed Pablo Bonjour and Veritas Restructuring Group, serving as chief restructuring officer and financial advisor, $540,297.50 in fees on the same interim basis on July 16, 2026, also matching Veritas's application in full. The official committee of unsecured creditors, appointed April 24, 2026, retained Dykema Gossett PLLC as counsel effective April 30, 2026, at hourly rates ranging from $350 for paralegal Sebastian Campos to $750 for member William Hotze.

Monthly operating reports show the scale of the shortfall facing unsecured creditors. StopLoss Logistics, LLC's report for the period ended May 31, 2026 listed total assets of $191,918 against total liabilities of $11,633,161.19, for negative equity of roughly $11.4 million.

Key Timeline

Date	Event
March 5, 2026	Voluntary chapter 11 petitions filed; cases jointly administered
April 24, 2026	Official committee of unsecured creditors appointed
May 4, 2026	Court denies Command 247's motion for relief from the automatic stay
May 14, 2026	Final order authorizes $5.75 million DIP facility
May 15, 2026	Command 247 appeals the stay-relief denial
May 22, 2026	Debtors file turnover motion against Command 247, Butaud, and Segura
May 27, 2026	Court approves $2.25 million Pensacola Property sale to Blackhawk PCS LLC
June 8, 2026	General claims bar date
June 10, 2026	Court extends plan-filing exclusivity to September 1, 2026
June 16, 2026	TM36 objects to IAG's proof of claim
June 24, 2026	Debtors retrieve records container from Segura
July 6, 2026	Agreed order resolves turnover access terms with Command 247
July 10, 2026	IAG responds and moves to compel arbitration of the claim dispute
July 15–16, 2026	Court allows first interim fees for Porter Hedges and Veritas/Bonjour
July 28, 2026	DIP challenge deadline
September 1, 2026	Plan-filing exclusivity expires; governmental claims bar date

Frequently Asked Questions

Who is the claims agent for StopLoss LLC?

Kroll Restructuring Administration LLC serves as claims and noticing agent. The filed bar date notice set June 8, 2026 as the general claims deadline and September 1, 2026 as the governmental claims deadline.

Has StopLoss LLC filed a chapter 11 plan?

No plan or disclosure statement appears in the filings reviewed. The debtors' exclusive period to file a plan runs through September 1, 2026, with exclusive solicitation extending to November 2, 2026.

What is the dispute between StopLoss and Insured Advocacy Group?

IAG holds a factored-receivables claim in an unknown amount that the debtors have objected to. IAG has responded by asking the court to send the entire dispute to arbitration under a 2024 addendum to its factoring agreement, while agreeing that any final dollar determination would stay with the bankruptcy court.

What happened with the Command 247 turnover dispute?

The court entered an agreed order on July 6, 2026 letting the debtors inspect and remove estate property and paper records from Command 247's Broussard and Opelousas, Louisiana locations, though it left the underlying ownership dispute between the company's founding members unresolved. A separate stipulation resolved the related turnover request against former general counsel Lauren Ashley Noel Segura.

For related coverage, see Warrior Technologies LLC, also before Judge Alfredo R. Perez in the Southern District of Texas, Society Pass's chapter 11 case, and Glacier Car and Dog Wash LLC, another small-business freefall filing.