Whitehall Trust: Pennsylvania Senior Living Operator Files After State Court Turnover Order
Whitehall Trust: Four PA senior living entities filed chapter 11 after court ordered turnover of receipts; 324 residents at risk.
Whitehall Trust and three related entities - Saucon Trust, Whitehall Manor Inc., and Saucon Valley Manor Inc. - filed chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania on December 26, 2025. The debtors operate two personal care communities in the Lehigh Valley, Whitehall Manor in Whitehall and Saucon Valley Manor in Hellertown, that serve 324 residents, including 90 in memory care.
Seven days earlier, a state court order voided amended leases and required the operating companies to turn over resident receipts and certain tenant rents to a court-appointed receiver. The chapter 11 filing invoked the automatic stay to keep the facilities operating while the debtors negotiate a cash collateral framework and litigate disputes with Lehigh Valley I LLC, the holder of roughly $31.3 million in mortgage debt, over trust eligibility, single asset real estate status, and whether a patient care ombudsman must be appointed.
| Debtor(s) | Whitehall Trust (lead) and three related debtors: Saucon Trust, Whitehall Manor Inc., Saucon Valley Manor Inc. |
| Court | U.S. Bankruptcy Court, Eastern District of Pennsylvania |
| Case Number | 25-15241 (lead) |
| Petition Date | December 26, 2025 |
| Judge | Hon. Patricia M. Mayer |
| Claims Agent | Omni Agent Solutions |
| Facilities | Whitehall Manor (Whitehall, PA) and Saucon Valley Manor (Hellertown, PA) |
| Residents | 324 total, including 90 in memory care |
| Employees | Approximately 287 |
| Secured Debt | Approximately $31.3 million in mortgage debt on the two properties |
Restructuring and Court Disputes
Immediate objective. The debtors are seeking to preserve resident care operations and restructure the mortgage debt while the bankruptcy court addresses a state court receivership order that would have redirected all resident receipts away from the operating companies. The same order required the operating companies to turn over certain tenant rents, including physical therapy rent from Good Shepherd, and reinstated lease terms that the state court said had been improperly amended.
First-day motions and case administration. The debtors filed joint administration, cash management, wages, utilities, taxes, insurance, and cash collateral motions on the petition date and sought authority to retain Omni Agent Solutions as claims agent. The court entered a joint administration order on December 30, 2025, and later approved consolidated noticing and confidentiality procedures for resident information. The schedules and statements deadline was extended to February 23, 2026, and the Section 341 meeting is scheduled for January 30, 2026.
| Order or Deadline | Status |
|---|---|
| Joint administration | Entered December 30, 2025 |
| Consolidated matrix and confidentiality procedures | Entered January 7, 2026 |
| Claims agent retention | Approved January 7, 2026 |
| Schedules and statements | Due February 23, 2026 |
| Section 341 meeting | Scheduled January 30, 2026 |
First-day relief detail. The wages motion sought authority to pay prepetition wages and benefits subject to the bankruptcy priority cap of $17,250 per employee, reflecting the need to keep caregivers and support staff on payroll. The utilities motion requested continued service without interruption, while the taxes motion sought to maintain existing payment plans for real estate taxes tied to the properties. The cash management motion covered continued use of established operating accounts, and the insurance motion sought authority to keep general liability, professional liability, auto, and workers' compensation coverage in force while the cases proceed.
| First-Day Motion | Purpose |
|---|---|
| Wages and benefits | Continue payroll and employee benefit payments within priority limits |
| Utilities | Maintain uninterrupted utility service at the facilities |
| Taxes | Continue prepetition tax payment plans for property taxes |
| Cash management | Keep existing operating accounts and cash management practices |
| Insurance | Maintain liability, auto, and workers' compensation coverage |
Cash collateral framework. The debtors seek authority to use prepetition accounts receivable and resident receipts to fund operations, offering replacement liens on the trust properties and proposing weekly reporting with a budget variance cap. Their cash collateral proposal also contemplates intercompany transfers and the payment of property taxes as an offset against unpaid rent. Lehigh Valley I LLC objects that the budget provides no debt service, offers replacement liens on collateral it already controls, includes payments to insiders and non-debtor affiliates, and fails to require postpetition rent from the operating companies to the trusts. A later objection argued that consolidated budgets across the trust and operating debtors amount to a de facto substantive consolidation and sought separate entity budgets plus contractual debt service payments of approximately $229,507.53 per month. The lender also requested enhanced insurance documentation and weekly variance reporting.
| Issue | Debtors' Position | Lender's Objection |
|---|---|---|
| Debt service | No payments proposed; focus on care operations | Contractual principal and interest payments required |
| Replacement liens | Liens on trust properties and rents | Liens are duplicative and provide no new protection |
| Budget structure | Consolidated budgets for all four debtors | Separate budgets required to avoid implicit consolidation |
| Intercompany transfers | Allowed within budget and reporting | Transfers benefit non-debtors and insiders |
| Insurance proof | Provide coverage and continue policies | Full, unredacted policies demanded |
Lease amendment dispute and rent arrears. Lehigh contends that the September 2023 lease amendments retroactively forgave roughly $8.4 million in accumulated rent owed by the operating companies to the trusts, and argues the amendments stripped value from collateral that secures the mortgages. The state court voided those amendments in December 2025, reinstating the prior lease terms and setting the stage for the turnover order that precipitated the chapter 11 filing. The debtors argue the amendments were part of an effort to stabilize operations during the pandemic-era downturn, but the lender has asked the bankruptcy court to treat the lease history as evidence that stricter cash collateral protections are required. Sanctions cross-motion. Lehigh sought sanctions tied to alleged misstatements about Priya Atiyeh's role and compensation and asked that her salary be halted or reimbursed by non-debtor entities, along with recovery of deposition-related costs. The debtors dispute those allegations and argue the issues are not specific to the cases, while maintaining that adequate protection exists under the proposed cash collateral framework.
Good Shepherd rent escrow. The debtors asked the bankruptcy court to release $25,258.88 in physical therapy tenant rent held by the state court receiver, arguing that postpetition collection makes the receiver a "custodian" subject to turnover under section 543. The receiver transferred the funds into debtors' counsel's IOLTA account by agreement pending a bankruptcy court ruling, and the debtors want the funds released under the cash collateral budget.
Eligibility and single asset real estate disputes. Lehigh moved to dismiss the trust debtors as ineligible under section 109 and separately argued that the trust entities are single asset real estate debtors subject to section 362(d)(3). The debtors responded that the trusts and operating companies form an integrated operating enterprise with going-concern value and that the facilities are active businesses, not passive real estate holdings. In the alternative, the debtors requested an extension of any 362(d)(3) deadline and proposed interest-only payments at the non-default contract rates (3.38 percent for Whitehall Trust and 2.5 percent for Saucon Trust), credited against principal.
Patient care ombudsman dispute. The debtors filed a motion seeking a determination that a patient care ombudsman is not necessary, emphasizing regulatory oversight, recent inspections, and staffing above minimum requirements. They also note that the communities operate as personal care homes, not skilled nursing facilities, and that residents obtain medical care from outside providers. The U.S. Trustee and Lehigh objected and argued that the court must appoint a patient care ombudsman absent specific factual findings to the contrary, citing resident vulnerability and alleged inspection issues. The court set the hearing for January 27, 2026.
Professional retention and reporting. Lehigh and the U.S. Trustee objected to the retention of Dilworth Paxson LLP over disclosure and potential conflict concerns, including questions about conflicts between the trust owners and the operating companies. The court later approved the retention effective as of the petition date. The debtors also filed December 2025 monthly operating reports for all four entities.
| Date | Milestone |
|---|---|
| December 26, 2025 | Chapter 11 petitions filed and first-day motions submitted |
| December 30, 2025 | Joint administration order entered |
| January 27, 2026 | Hearings set for the patient care ombudsman request and the Good Shepherd rent escrow motion |
| January 30, 2026 | Section 341 meeting of creditors |
| February 23, 2026 | Deadline for schedules and statements (extended) |
Corporate Structure and Ownership
Whitehall Trust uses a structure common in healthcare real estate: property-owning trusts lease facilities to operating companies. The four debtors are split between two real estate trusts and two operating S-corporations.
| Debtor | Entity Type | Role | Facility |
|---|---|---|---|
| Whitehall Trust | Pennsylvania trust | Property owner | Whitehall Manor (1177 6th Street, Whitehall, PA) |
| Saucon Trust | Pennsylvania trust | Property owner | Saucon Valley Manor (1050 Main Street, Hellertown, PA) |
| Whitehall Manor Inc. | Pennsylvania S-corp | Operating company | Whitehall Manor |
| Saucon Valley Manor Inc. | Pennsylvania S-corp | Operating company | Saucon Valley Manor |
The ownership chain runs through multiple trusts and LLCs. Whitehall Fiduciary LLC serves as trustee of Whitehall Trust, while Saucon Management LLC serves as trustee of Saucon Trust. Manor Trust owns both operating companies, with Anka Management LLC as trustee of Manor Trust. Abraham Atiyeh is the primary beneficiary of both property trusts and the manager or main member of the trustee LLCs, making him the ultimate beneficial owner of the four debtors.
Intercompany leases and amendments. The trusts lease their facilities to the operating companies. In September 2023, the parties executed amended leases that later became the focal point of foreclosure litigation and were voided by state court order in December 2025. The lease structure also drives the cash collateral dispute, because the trusts are the property owners while the operating companies collect resident payments.
Key individuals. Nimita Kapoor-Atiyeh, Abraham Atiyeh's wife, serves as president of the operating companies and is the licensed administrator for Saucon Valley Manor. Priya Atiyeh, his daughter, serves as vice president and is the licensed administrator for Whitehall Manor.
Related facilities. The Atiyeh family also operates other regional senior living facilities under the Manors of the Valley umbrella, including Parkland Manor and Bethlehem Manor, which remain outside the chapter 11 cases. Local coverage has described the portfolio as a family-owned enterprise focused on senior living in the Lehigh Valley.
Operations and Facilities
Whitehall Manor and Saucon Valley Manor are personal care homes regulated under Pennsylvania's personal care home rules (55 Pa. Code Section 2600). Both facilities operate on a private-pay model without Medicare or Medicaid reimbursement.
| Facility | Location | Residents | Memory Care | Monthly Rate |
|---|---|---|---|---|
| Whitehall Manor | 1177 6th Street, Whitehall, PA | 127 | 13 | About $4,700 |
| Saucon Valley Manor | 1050 Main Street, Hellertown, PA | 197 | 77 | About $4,500 |
| Total | 324 | 90 |
Resident census and licensed capacity. The debtors report that Whitehall Manor is licensed for 130 residents and operates at 127 residents, while Saucon Valley Manor is licensed for 201 residents and operates at 197 residents. The near-capacity census underscores the operational stakes of the turnover order and the importance of uninterrupted staffing and vendor support while the cases proceed.
Service lines and resident offerings. The Whitehall Manor and Saucon Valley Manor campuses offer independent living, personal care, advanced physical care, and three levels of secured Alzheimer's (memory) care. The operators describe an all-inclusive model with no buy-in fees and month-to-month residency terms, with short-term respite care and recreational programming as part of the offering. Public directories list Whitehall Manor and Saucon Valley Manor as regional senior living options in the Lehigh Valley.
Workforce and payroll. The debtors employ about 287 people across the two facilities, including roughly 280 hourly employees and seven salaried staff. Biweekly payroll runs about $360,000, reflecting the labor-intensive nature of personal care operations and the staffing needed for memory care residents. The debtors asked for authority to pay prepetition wages and benefits subject to the bankruptcy priority cap.
| Workforce Category | Headcount |
|---|---|
| Hourly employees | About 280 |
| Salaried employees | About 7 |
| Total | About 287 |
Regulatory profile. The debtors state that the facilities are subject to routine inspections, including state annual inspections, county unannounced visits, and oversight by an ombudsman contractor. The debtors also note that the communities do not provide on-site medical care and that residents receive medical services from outside providers. They report that staffing levels exceed minimum requirements.
Revenue model and ancillary income. The debtors rely primarily on private-pay resident fees. The operating companies also derive income from service agreements with non-debtor affiliates and from a physical therapy tenant at Whitehall Manor. The trusts collect rent from the operating companies under intercompany leases, and those rent flows are central to the foreclosure and cash collateral disputes.
| Revenue Source | Description |
|---|---|
| Resident fees | Private-pay monthly rates of about $4,500 to $4,700 |
| Tenant rent | Physical therapy tenant at Whitehall Manor (Good Shepherd) |
| Affiliate services | Food preparation, maintenance, nursing, and housekeeping for affiliated facilities |
| Intercompany rent | Operating companies pay rent to the property-owning trusts |
Local recognition. The operators highlight multiple regional awards and recognitions for both communities, including Readers' Choice awards and third-party senior living recognitions listed on the Whitehall Manor and Saucon Valley Manor sites. Those marketing materials emphasize community positioning in the Lehigh Valley senior living market. The debtors also report that the facilities ended assisted living community certification in 2022 to reduce regulatory costs, while continuing to operate as personal care homes.
Capital Structure and Foreclosure Timeline
The debtors' capital structure is dominated by two mortgages originally issued by M&T Realty Capital Corporation in 2012 and later assigned to Lehigh Valley I LLC.
| Property | Original Loan Date | Original Amount | Current Amount (June 2024) | Past Due |
|---|---|---|---|---|
| Whitehall (1177 6th Street) | January 26, 2012 | $15,788,700 | About $13,832,351 | Over $2.4 million |
| Saucon (1050 Main Street) | December 1, 2012 | $19,462,800 | About $17,516,630 | Over $2.2 million |
| Total | $35,251,500 | About $31,348,981 | Over $4.6 million |
| Location | Estimated Property Tax Arrears |
|---|---|
| Whitehall | About $371,000 |
| Saucon | About $412,000 |
| Total | About $783,000 |
Payment interruption and assignment chain. The operating companies stopped paying rent to the trusts in February 2021 to prioritize resident care and payroll, and the trusts made their last direct mortgage payment on February 5, 2021. The Manors paid property taxes on behalf of the trusts as an offset against unpaid rent. M&T assigned the non-performing mortgages to HUD in November 2022. HUD auctioned the loans in 2023, Windstream Capital LLC purchased them, and Lehigh Valley I LLC acquired the mortgages in June 2024.
Foreclosure and receivership timeline.
| Date | Event |
|---|---|
| June 20, 2024 | Lehigh files foreclosure actions against both trusts |
| August 7, 2024 | Lehigh seeks appointment of a receiver |
| May 2, 2025 | State court appoints Erin Duffy, Esq. as receiver |
| December 9, 2025 | State court warns of sanctions tied to receiver subpoenas |
| December 18, 2025 | Evidentiary hearing on sanctions and lease amendments |
| December 19, 2025 | State court voids lease amendments and orders turnover of resident receipts |
| December 26, 2025 | Chapter 11 petitions filed |
The debtors say that the December 19 order would have stripped operating cash flow and forced the facilities to close. The chapter 11 filing halted enforcement of that order and shifted the dispute into bankruptcy court, where the key issues now revolve around cash collateral, intercompany leases, and trust eligibility.
Ownership Background and Expansion Footprint
Abraham Atiyeh, the primary beneficiary of the trusts, is CEO of Pennsylvania Venture Capital, an adaptive reuse real estate developer described as focused on repurposing unused properties throughout Pennsylvania. The broader "Manors of the Valley" portfolio includes other Lehigh Valley senior living facilities that are not debtors in these cases.
Parkland Manor expansion. The Parkland Manor campus opened in 2019 and received preliminary approval for an 80-unit independent living expansion, including a four-story building with 16 studio apartments and 64 one-bedroom units plus additional amenities such as a fitness room and indoor pool. The expansion plan included 89 parking spaces and a design intended to match the architecture of the Hellertown facility.
Bethlehem Manor acquisition. In 2020, Atiyeh acquired a former rehabilitation facility in Bethlehem for about $1 million and renamed it Bethlehem Manor Memory Care, adding 30 private-bed memory care rooms and approximately 20 employees to the portfolio.
Bethlehem litigation. Atiyeh later filed a federal lawsuit seeking at least $10 million in damages over a rejected plan to build an 84-bed psychiatric hospital, arguing that Bethlehem's zoning changes blocked the project and cost years of development time. The dispute is detailed in local coverage, which reported potential damages claims tied to projected profits and alleged violations of disability and equal protection statutes.
Industry Context: Senior Living Pressures in Pennsylvania
Bankruptcy trend and capital markets. Senior care bankruptcies hit a two-year high in early 2025, with seven filings in Q1 2025 and the sector representing over 40 percent of healthcare bankruptcies. That report also highlighted loan delinquencies around 2.6 percent by the end of 2024 and noted that residents in continuing care retirement communities lost more than $190 million during recent bankruptcies.
Industry advisors point to pressure from interest rates, wage inflation, staffing shortages, and post-pandemic census volatility, themes echoed in a senior living restructuring overview. Despite recent occupancy recovery, the industry faces a refinancing wave, with about $10 billion in senior living loans maturing in 2025. The same industry review notes that occupancy has risen for 12 consecutive quarters and that Medicare Advantage now covers more than half of Medicare beneficiaries, reshaping payor dynamics.
The bankruptcy trend data also point to longer-term sector stress. The senior housing report cited senior care as 24.1 percent of all healthcare bankruptcies between 2019 and Q1 2025, and referenced at least 16 continuing care retirement community filings over the prior five and a half years. Those indicators frame Whitehall Trust's filing within a sector that has seen elevated distress even as occupancy stabilizes.
Pandemic cost and funding gap. Industry data show the long-term care sector expected about $94 billion in pandemic-era losses across 2020 and 2021, with roughly another $30 billion in PPE and staffing costs. The same analysis projected that more than 1,600 nursing homes could close without financial assistance and reported steep staffing declines during the pandemic. Assisted living operators have argued that relief funding was uneven, pointing to estimates that assisted living communities received about $1 billion in federal relief versus $12.5 billion for nursing homes. That industry review also reported that 70 percent of assisted living providers continue to face substantial or severe workforce shortages and that the sector's workforce shrank from more than 1.5 million to about 1.3 million employees.
Pennsylvania pressures. A LeadingAge PA survey reported that 1 in 4 certified nursing home beds in the state are offline due to staffing and funding constraints, and a separate workforce survey projected a shortage of 2,600 care providers to meet staffing ratio requirements with more than 20,000 additional shortages per year projected through 2032. Reporting on Pennsylvania closures notes a decline in nursing home counts and the impact of new minimum staffing mandates that increased daily direct care hours from 2.87 to 3.2 hours per resident. The state has also seen large chapter 11 filings in the sector, including SpiriTrust Lutheran, which operated six facilities and reported substantial liabilities in its 2025 filing, and related local coverage of the case.
Foreclosure and receivership activity. Foreclosure pressure is not limited to Pennsylvania. A 2024 report described 17 Petersen Health Care facilities entering receivership or foreclosure disputes tied to nearly $51 million in loans, a reminder that lender enforcement actions can move quickly when operators face liquidity stress.
| Metric | Context |
|---|---|
| Seven senior care bankruptcies in Q1 2025 | Two-year high for senior care filings |
| Over 40 percent of healthcare bankruptcies | Senior care share of sector filings in Q1 2025 |
| About $10 billion in loan maturities | Refinancing pressure for senior living in 2025 |
| About $94 billion in losses (2020-2021) | Pandemic-era cost burden for long-term care |
| One in four beds offline | Pennsylvania nursing home capacity constraints |
| Assisted living relief at $1B vs $12.5B | Funding gap between assisted living and nursing homes |
Frequently Asked Questions
Why did Whitehall Trust and its affiliates file for chapter 11? The immediate trigger was a December 19, 2025 state court order that voided amended leases and required the operating companies to turn over resident receipts and certain tenant rents to a receiver. The debtors say the order would have cut off operating cash and forced both facilities to close. Chapter 11 preserves operations while the parties litigate cash collateral and foreclosure disputes.
Which entities are in the Whitehall Trust bankruptcy? The cases include Whitehall Trust, Saucon Trust, Whitehall Manor Inc., and Saucon Valley Manor Inc. The trusts own the real estate and the S-corporations operate the facilities.
What facilities are covered by the filing? The cases cover Whitehall Manor in Whitehall, Pennsylvania, and Saucon Valley Manor in Hellertown, Pennsylvania. The two facilities serve 324 residents, including 90 in memory care programs.
What is the secured debt at the center of the case? Lehigh Valley I LLC holds roughly $31.3 million in mortgage debt secured by the two properties. The loans originated with M&T Realty Capital Corporation, were assigned to HUD in 2022, sold in a 2023 auction to Windstream Capital LLC, and assigned to Lehigh in June 2024.
What is the cash collateral dispute about? Lehigh Valley I LLC asserts that all resident receipts are its cash collateral and objects to the debtors' proposed budget, replacement liens, and lack of debt service payments. The debtors argue that continued use of cash collateral is required to keep operations running and have proposed weekly reporting and budget controls.
Why are the trust eligibility and single asset real estate issues being litigated? Lehigh seeks dismissal of the trust entities under section 109 and argues the trusts are single asset real estate debtors. The debtors counter that the trusts and operating companies function as an integrated operating enterprise, and they have requested an extension and interest-only payments if the court finds the trusts are SARE debtors.
What is the patient care ombudsman dispute? The debtors asked the court to find that a patient care ombudsman is not necessary because the facilities are heavily regulated and have recent inspections. The U.S. Trustee and Lehigh objected, and the court set the issue for a January 27, 2026 hearing.
Who is the claims agent for Whitehall Trust? Omni Agent Solutions serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.
For more chapter 11 case research and restructuring analysis, visit the ElevenFlo blog.
