Whitehall Trust: Pennsylvania Senior Living Operator Files After State Court Turnover Order
Four entities operating two Lehigh Valley senior living facilities filed chapter 11 after a state court ordered turnover of all resident receipts. 324 residents (90 in memory care) at risk. Secured creditor holds $31.3M mortgage debt.
Whitehall Trust Chapter 11 Bankruptcy
Four related entities operating two senior living facilities in Pennsylvania's Lehigh Valley filed chapter 11 petitions on December 26, 2025—seven days after a state court order that would have cut off all revenue for operations serving 324 residents, including 90 in memory care. Whitehall Trust serves as the lead case for jointly administered proceedings involving Saucon Trust, Whitehall Manor Inc., and Saucon Valley Manor Inc.
The four-debtor structure reflects a common real estate/operating company split in healthcare: the trusts own the facilities, while the S-corporations operate them. The filing stayed a state court turnover order that would have required the operating companies to surrender all resident receipts to a court-appointed receiver—forcing cessation of operations and displacement of 324 residents.
The secured creditor, Lehigh Valley I LLC, which acquired the mortgages at a discount through a HUD auction, characterized the filing as a "last-minute, holiday bankruptcy" filed to evade obligations after nearly five years without mortgage payments. The creditor has contested the debtors' use of cash collateral and alleged the entities engaged in fraudulent transfers by executing lease amendments that forgave approximately $8.4 million in accumulated back rent.
Case Snapshot
| Field | Value |
|---|---|
| Debtor | Whitehall Trust (Lead); Saucon Trust; Whitehall Manor Inc.; Saucon Valley Manor Inc. |
| Headquarters | Whitehall, PA (Lehigh Valley) |
| Industry | Senior Living / Personal Care Homes |
| Residents Served | 324 (90 in memory care) |
| Employees | ~287 |
| Assets | Real estate at 1177 6th Street (Whitehall) and 1050 Main Street (Hellertown) |
| Liabilities | ~$31.3M secured mortgage debt |
| Filing Date | December 26, 2025 |
| Court | E.D. Pennsylvania |
| Case Number | 25-15241 (Lead) |
| Judge | Patricia M. Mayer |
| Claims Agent | Omni Agent Solutions |
The debtors seek to continue operations, protect residents from displacement, and restructure mortgage obligations that have been in default since February 2021. The secured creditor has contested the use of cash collateral, setting up a contested case from the outset.
Corporate Structure and Ownership
The Whitehall Trust bankruptcy involves four related entities operating under an ownership structure common in healthcare real estate: property-owning trusts that lease to operating companies.
Real Estate Trusts (Property Owners):
- Whitehall Trust — owns the property at 1177 6th Street, Whitehall, PA (Whitehall Manor facility)
- Saucon Trust — owns the property at 1050 Main Street, Hellertown, PA (Saucon Valley Manor facility)
Operating Companies (S-Corporations):
- Whitehall Manor Inc. — operates senior living services at the Whitehall property
- Saucon Valley Manor Inc. ("SVM") — operates senior living services at the Saucon property
The ownership chain flows through multiple trust and LLC layers. 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 (Whitehall Manor Inc. and SVM), with Anka Management LLC serving as Trustee of Manor Trust. Abraham Atiyeh is the primary beneficiary of both property trusts and Manager/Main Member of all trustee LLCs, making him the ultimate beneficial owner of all four debtor entities.
Key Principals:
- Abraham Atiyeh — Manager/Main Member of trustee LLCs; primary beneficiary of property trusts; also CEO of Pennsylvania Venture Capital, an adaptive reuse real estate developer
- Nimita Kapoor-Atiyeh — Abraham's wife; President of both operating companies; licensed administrator (Saucon Valley Manor)
- Priya Atiyeh — Abraham's daughter; Vice President of both operating companies; licensed administrator (Whitehall Manor)
The Atiyeh family operates additional senior living facilities under the "Manors of the Valley" umbrella, including Parkland Manor and Bethlehem Manor, which are not debtors in these proceedings. Pennsylvania Venture Capital, Atiyeh's real estate development firm, has been described as "focused on breathing new life into unused properties" across institutional, commercial, and residential sectors in Pennsylvania. Atiyeh was featured in the Lehigh Valley Business Power 100 list in 2022.
Business Operations
Whitehall Manor and Saucon Valley Manor are personal care homes serving seniors in Pennsylvania's Lehigh Valley region. Both facilities operate on a private-pay model without Medicare or Medicaid dependency.
| Facility | Location | Residents | Memory Care | Monthly Rate |
|---|---|---|---|---|
| Whitehall Manor | 1177 6th Street, Whitehall, PA | 127 | 13 | ~$4,700 |
| Saucon Valley Manor | 1050 Main Street, Hellertown, PA | 197 | 77 | ~$4,500 |
| Total | 324 | 90 |
Services Provided. Both facilities offer Independent Living, Personal Care, Advanced Physical Care, and three levels of Secured Alzheimer's (Memory) Care. According to the Manors of the Valley website, the facilities provide an "all-inclusive" service delivery model with no buy-in fees—residents pay on a month-to-month basis. Services include recreational programs, short-term respite care options, and van shuttle service for appointments. The facilities are regulated as Personal Care Homes (PCH) under 55 PA Code Section 2600. The debtors ceased Assisted Living Community (ALC) certification in 2022 to reduce regulatory costs. Both facilities have received multiple Readers' Choice awards (2017-2024) and Senior Advisor recognitions.
Revenue Model. The primary revenue source is private pay from residents—monthly personal care fees averaging $4,500-$4,700 per resident. Unlike many senior living operators, the debtors do not rely on Medicare or Medicaid reimbursement. Ancillary revenue sources include rental income from Good Shepherd, an on-site physical therapy tenant at Whitehall Manor, and service agreements with non-debtor affiliates. SVM provides food preparation, maintenance, nursing, and housekeeping services to Saucon Valley Manor II LLC. SVM also provides food preparation services to Bethlehem Manor Senior Living LLC, while Whitehall provides food preparation to Parkland Manor LLC. The property trusts collect rent from the operating companies under lease arrangements—the rent payments between operating companies and trusts became the central issue in the foreclosure litigation.
Path to Bankruptcy: COVID-19 and Mortgage Default
The debtors' path to bankruptcy traces to the COVID-19 pandemic and its impact on senior living operations. The pandemic arrived in Pennsylvania in March 2020, bringing staffing shortages as healthcare workers faced burnout and competing employment opportunities, increased labor costs including hazard pay and overtime to retain essential staff, personal protective equipment and infection control expenses, and reduced census as families delayed move-in decisions during lockdowns and visitation restrictions. The senior living industry faced particularly acute challenges, with senior care representing over 40% of total healthcare bankruptcies in Q1 2025 and the sector requiring an estimated 660,000 additional workers by 2033 to meet projected demand.
The Rent and Mortgage Payment Cascade. In February 2021, the operating companies (Manors) ceased paying rent to the property trusts, prioritizing resident care and employee wages over landlord obligations. On February 5, 2021, the trusts made their last direct mortgage payment to M&T Realty Capital Corporation. The Manors continued paying property taxes on behalf of the Trusts as an offset against unpaid rent, but without rent income from the operating companies, the trusts could not service their mortgages.
Mortgage Assignment Chain. The mortgages on both properties originated with M&T Realty Capital Corporation in 2012—$15.8 million on Whitehall in January 2012 and $19.5 million on Saucon in December 2012, totaling approximately $35.3 million. In November 2022, M&T assigned the non-performing mortgages to HUD. In 2023, HUD auctioned the mortgages, and Windstream Capital LLC purchased them at a discount. In June 2024, the mortgages were assigned to Lehigh Valley I LLC.
Current Debt Status. As of June 2024, the total secured debt stood at approximately $31.3 million—$13.8 million on the Whitehall mortgage (with over $2.4 million past due) and $17.5 million on the Saucon mortgage (with over $2.2 million past due). Total past-due amounts exceeded $4.6 million. Property tax arrearages totaled approximately $783,000—$371,000 on Whitehall and $412,000 on Saucon.
The Foreclosure Proceedings and Receivership
Lehigh Valley I LLC initiated foreclosure proceedings in June 2024, shortly after acquiring the mortgages. The foreclosure litigation culminated in a December 2025 state court order that triggered the bankruptcy filing.
| Date | Event |
|---|---|
| June 20, 2024 | Lehigh files foreclosure actions against both Trusts in Pennsylvania state court |
| August 7, 2024 | Lehigh files Motion to Appoint Receiver |
| May 2, 2025 | Court appoints Erin Duffy, Esq. as Receiver |
| September 21, 2023 | Fourth (Whitehall) and Sixth (Saucon) Lease Amendments executed between Trusts and Manors |
| December 9, 2025 | Court orders sanctions if Debtors fail to respond to Receiver subpoenas by December 29 |
| December 18, 2025 | Evidentiary hearing on sanctions and Motion to Avoid Lease Amendments |
| December 19, 2025 | Court voids Amended Leases; orders Manors to turn over all receipts to Receiver starting January 2026 |
| December 26, 2025 | Chapter 11 petitions filed |
The Lease Amendment Dispute. In September 2023, the property trusts and operating companies executed amended lease agreements. The amendments allegedly forgave approximately $8.4 million in accumulated back rent owed by the Manors to the Trusts. Lehigh Valley I LLC challenged the amendments as fraudulent transfers, arguing they were designed to strip value from the mortgaged properties.
The December 19th Order. The state court order that triggered the filing imposed three requirements: (1) voided the Amended Leases between the Trusts and Manors, reinstating original lease terms with accumulated arrears; (2) required immediate turnover of all funds from the Good Shepherd physical therapy tenant since October 31, 2025; and (3) required turnover of all occupant receipts (resident payments) starting January 2026. This order would have deprived Whitehall Manor Inc. and SVM of all revenue, forcing immediate cessation of operations. Without revenue to pay the approximately 287 employees who provide direct care, the facilities could not continue operations. The 324 residents—including 90 in memory care requiring specialized dementia care—would have faced displacement with minimal notice during the holiday period. The chapter 11 filing seven days later, on December 26, 2025, invoked the automatic stay under Section 362, halting enforcement of the state court order and allowing continued operations while the debtors seek to restructure their obligations.
Secured Creditor Objection
Lehigh Valley I LLC filed a detailed objection on December 29, 2025 (Docket #41), contesting the debtors' cash collateral motion and characterizing the filing as an attempt to evade five years of obligations.
Characterization of Filing. The lender described the petitions as a "last-minute, holiday bankruptcy" filed to evade obligations after nearly five years without mortgage payments. Lehigh asserted it holds first-priority security interests in all debtor property, including all collected rents through Lessee Security Agreements, positioning all resident payment receipts as the lender's cash collateral.
Objections to Cash Collateral Motion. The lender raised five primary objections: (1) inadequate protection—the proposed adequate protection provides for no debt service payments (no principal, no interest); (2) useless replacement liens—debtors offer replacement liens on property the lender already holds liens on; (3) improper expense payments—the budget includes payments to family members, insider management fees, and non-debtor affiliates; (4) no intercompany rent—fails to require current rent payments from Manors to Trusts; and (5) missing insurance documentation—debtors have not provided complete, unredacted insurance policies.
Relief Demanded. Lehigh Valley I LLC demanded payment of contractual debt service (principal, interest, property taxes, insurance), payment of current rent obligations from Manors to Trusts, weekly reporting on actual versus budget receipts and expenses, and force-placed insurance if documentation was not provided within a specified period.
The Fraudulent Transfer Allegation. The lender asserted the September 2023 lease amendments were "nakedly fraudulent," alleging the amendments forgave $8.4 million in accumulated back rent. The lender claimed the debtors intentionally structured the transactions to strip value from the mortgaged properties. These allegations formed the basis for the state court's December 19 order voiding the amended leases.
Workforce and Employee Claims
The four debtor entities collectively employ approximately 287 people across the two facilities.
| Category | Count |
|---|---|
| Hourly employees | ~280 |
| Salaried employees | ~7 |
| Total | ~287 |
Average bi-weekly payroll is approximately $360,000, administered through Isolved. Annual payroll costs therefore exceed $9.3 million. The debtors sought authority to pay prepetition wages and benefits, subject to the $17,250 priority cap per employee under Section 507(a)(4) of the Bankruptcy Code. The operating companies employ the direct care staff, including nurses, aides, and support personnel who provide daily care to the 324 residents. The salaried employees include licensed administrators—Nimita Kapoor-Atiyeh serves as licensed administrator for Saucon Valley Manor, while Priya Atiyeh serves as licensed administrator for Whitehall Manor. Given the memory care population of 90 residents, the facilities require specialized dementia care training and staffing ratios to meet Pennsylvania regulatory requirements.
First Day Relief
The debtors filed eleven first-day motions on December 26, 2025, seeking relief to maintain operations and protect residents during the chapter 11 cases.
Administrative Motions:
- Joint Administration Motion (Docket #11) — consolidate four related cases under lead case
- Case Management Motion (Docket #12) — establish administrative procedures
- Consolidated Matrix Motion (Docket #13) — use combined creditor list for all debtors
Operational Motions:
- Cash Management Motion (Docket #16) — continue bank accounts at Truist Bank
- Cash Collateral Motion (Docket #17) — use prepetition receivables and rents for operations
- Employee Wages Motion (Docket #18) — pay prepetition wages and benefits (subject to priority cap)
- Utilities Motion (Docket #19) — prohibit utility providers from discontinuing services
- Taxes Motion (Docket #21) — pay prepetition taxes per existing payment plan
- Insurance Motion (Docket #27) — continue insurance programs
Professional Retentions:
- Claims Agent Application (Docket #22) — appoint Omni Agent Solutions
- Counsel Application (Docket #30) — retain Dilworth Paxson LLP
The court entered the Joint Administration Order (Docket #53) on December 30, 2025, consolidating the four cases for procedural purposes.
Cash Collateral
The debtors' cash collateral motion seeks authority to use prepetition accounts receivable and prepetition gross receipts (rent payments from residents) to fund immediate post-petition operating requirements and maintain resident care.
The Lender's Security Interest. Lehigh Valley I LLC asserts a first-priority security interest in all debtor property, including all collected rents through Lessee Security Agreements. Under the lender's position, all resident payment receipts constitute the lender's cash collateral.
Budget Dispute. The contested budget items include payments to Atiyeh family members, insider management fees, payments to non-debtor affiliates (Parkland Manor, Bethlehem Manor), and the absence of any provision for current rent from the Manors to the Trusts. The lender argued these budget items improperly divert funds that should flow to the secured creditor.
The cash collateral dispute remains central to the case, with the lender demanding contractual debt service payments as a condition of any use of its collateral. The lender has demanded force-placed insurance if the debtors do not provide complete, unredacted insurance policy documentation within a specified period. The budget dispute reflects the broader tension between the debtors' need to maintain operations for resident care and the secured creditor's position that it is entitled to all cash flows from the mortgaged properties after nearly five years without debt service.
Professional Retentions
| Role | Firm |
|---|---|
| Debtor's Counsel | Dilworth Paxson LLP (Michelle Lee) |
| Claims Agent | Omni Agent Solutions |
The court requires appointment of a healthcare ombudsman by January 26, 2026, as mandated by statutory requirements for healthcare bankruptcy cases under Section 333 of the Bankruptcy Code. The ombudsman will monitor the quality of patient care during the chapter 11 cases. According to WhatNow, the chapter 11 reorganization plan is due April 27, 2026, with disclosure statements and schedules due January 9, 2026.
Industry Context
The Whitehall Trust filing occurs during a period of elevated stress in the senior living sector, with bankruptcy filings rising across the industry.
Senior Living Bankruptcy Trends. Senior care bankruptcies reached a two-year high in the first quarter of 2025, with seven filings compared to three in the fourth quarter of 2024, according to Senior Housing News. Senior care represented over 40% of total healthcare bankruptcies in Q1 2025. Between 2019 and Q1 2025, senior care comprised 24.1% of all healthcare bankruptcy filings. At least 16 Continuing Care Retirement Communities (CCRCs) have filed chapter 11 over the past 5.5 years. Industry consultants project senior care facility bankruptcies to rise from 11 in 2024 to 15 in 2025.
Pennsylvania Context. Pennsylvania has seen multiple senior living bankruptcies. SpiriTrust Lutheran filed chapter 11 in November 2025, operating six facilities across three Pennsylvania counties and serving approximately 6,400 residents annually with estimated liabilities of $100-500 million, according to The Street. SpiriTrust had previously shut down its SpiriTrust Lutheran Home Care & Hospice affiliate in August 2025. Pennsylvania nursing homes declined from 695 in 2019 to approximately 650 over five years, according to the York Dispatch. Industry advocates cite years of underfunding, inflation, staffing mandates, and inadequate Medicaid reimbursement rates as driving factors.
Contributing Factors. Industry challenges include interest rate and market uncertainty, rising labor costs, Medicaid funding shortfalls despite attempts to close the reimbursement gap, pressure from payers, increased insurance liability premiums, and new staffing mandates requiring specific daily direct care amounts. The industry requires over 660,000 additional workers by 2033 to meet projected demand as the resident population grows from 2.9 million to 4.3 million. CCRC employment has declined 5% since 2020, while assisted living staffing has increased 11%. Families have lost more than $190 million in combined savings across CCRC bankruptcies during the pandemic, with some residents receiving only a fraction of their entrance fee deposits back through bankruptcy proceedings.
Top Unsecured Creditors
The Top 20 creditors list for Saucon Trust includes the following notable unsecured claims:
| Creditor | Amount |
|---|---|
| Great American Risk Solutions | $25,000 |
| The Morning Call Media Group | $24,509 |
| PPL Electric Utilities Corp. | $20,663 |
| Lahoud Law Group, P.C. | $18,573 |
| UGI Energy Services | $16,902 |
| F.W. Webb Company | $12,748 |
| Berkheimer | $12,000 |
| Aramsco Inc. | $11,050 |
| Eastern Alliance | $8,205 |
| Service Electric Cablevision | $6,252 |
The unsecured creditor list includes utilities, insurance, legal services, and trade vendors typical of senior living operations. The claims reflect the debtors' Lehigh Valley operations and regional vendor relationships. PPL Electric Utilities Corp. and UGI Energy Services represent essential utility providers for facility operations. The Morning Call Media Group, a regional newspaper, appears on the list as a creditor, having covered the Atiyeh family's business activities. Great American Risk Solutions and Eastern Alliance represent insurance-related claims. Lahoud Law Group, P.C. reflects legal services expenses, while F.W. Webb Company, Aramsco Inc., and Cintas Corporation represent facility supply and service vendors.
Key Dates
| Event | Date |
|---|---|
| Petition Date | December 26, 2025 |
| First Day Hearing | December 30, 2025 |
| Schedules and Statements Due | January 9, 2026 |
| Healthcare Ombudsman Appointment | By January 26, 2026 |
| 341 Meeting | January 30, 2026 at 1:00 PM (Telephonic) |
| Chapter 11 Plan Due | April 27, 2026 |
Abraham Atiyeh Background
Abraham Atiyeh serves as the primary beneficiary and ultimate controlling owner of all four debtor entities. His business activities extend beyond the debtor facilities to include real estate development and other senior living operations.
Business Background. Atiyeh is CEO of Pennsylvania Venture Capital, an adaptive reuse real estate development firm that specializes in repurposing unused properties across institutional, commercial, and residential sectors. The firm has been featured in the Lehigh Valley Business Power 100 list for 2022. His portfolio includes multiple senior living facilities under the "Manors of the Valley" umbrella.
Facility Expansion History. In September 2019, Parkland Manor opened in South Whitehall Township with 78 beds for personal care and secured memory care. According to The Morning Call, the facility received preliminary approval for an 80-unit independent living expansion—a four-story, 91,250-square-foot building with 16 studio apartments and 64 one-bedroom units across four floors, plus 89 parking spaces. The expansion plans included a fitness room, community room, indoor pool, and van shuttle service. In June 2020, Atiyeh acquired the former Blough Healthcare and Rehabilitation Center in Bethlehem for approximately $1 million, according to The Morning Call. The property had been vacant for approximately two months following its previous operation by Guardian Elder Care. The facility was renamed Bethlehem Manor Memory Care and operates with 30 private-bed rooms and approximately 20 employees.
Bethlehem Litigation. In December 2022, Atiyeh filed a federal lawsuit seeking at least $10 million (potentially $50 million based on 20-year lost profits) in damages from the City of Bethlehem over rejected efforts to build an 84-bed psychiatric hospital called Bethlehem Manor Villages. The project was proposed in 2013 and received conditional planning approval. In 2017, the city amended its zoning ordinance to restrict behavioral care, and the project was denied. In 2021, Atiyeh won in Commonwealth Court, with judges ruling the city erred in classifying the facility. The federal lawsuit alleges violations of the ADA, Rehabilitation Act, and 14th Amendment Equal Protection clause.
FAQs
Why did Whitehall Trust file for chapter 11 bankruptcy?
The immediate trigger was a December 19, 2025 state court order that voided lease amendments between the property trusts and operating companies and required turnover of all resident receipts to a court-appointed receiver. This would have eliminated all revenue for the operating companies that care for 324 residents, forcing immediate cessation of operations. The underlying cause was five years of mortgage payment defaults following COVID-19 disruptions that depleted operating cash.
Who is the secured creditor in the Whitehall Trust bankruptcy?
Lehigh Valley I LLC holds approximately $31.3 million in first-priority mortgage debt on the two senior living properties. Lehigh acquired the mortgages through a HUD auction after M&T Realty Capital Corporation assigned them to HUD in November 2022. The lender has contested the debtors' use of cash collateral and filed detailed objections to the debtors' first-day motions.
How many residents could be affected by this bankruptcy?
A total of 324 residents across two facilities—127 at Whitehall Manor and 197 at Saucon Valley Manor. Of these, 90 residents are in memory care programs requiring specialized care.
What services do Whitehall Manor and Saucon Valley Manor provide?
Both facilities offer Independent Living, Personal Care, Advanced Physical Care, and three levels of Secured Alzheimer's (Memory) Care. The facilities are regulated as Personal Care Homes under Pennsylvania law. Monthly rates average $4,500-$4,700 per resident on a private-pay basis.
What are the lease amendment fraud allegations?
Lehigh Valley I LLC alleges that the September 2023 lease amendments between the property trusts and operating companies were "nakedly fraudulent" because they forgave approximately $8.4 million in accumulated back rent. The state court voided these amendments on December 19, 2025, finding they improperly stripped value from the mortgaged properties.
How many employees work at the Whitehall Trust facilities?
The debtors collectively employ approximately 287 people—about 280 hourly employees and 7 salaried employees. Average bi-weekly payroll is approximately $360,000.
When is the plan of reorganization due?
The chapter 11 plan is due April 27, 2026 under the court's scheduling order. Schedules and statements of financial affairs were due January 9, 2026.
What is the status of senior living bankruptcies in Pennsylvania?
Pennsylvania has seen multiple senior living bankruptcies. SpiriTrust Lutheran filed chapter 11 in November 2025, serving approximately 6,400 residents across six facilities with estimated liabilities of $100-500 million. Pennsylvania nursing homes declined from 695 in 2019 to approximately 650 over five years. Industry challenges include underfunding, inflation, staffing mandates, and inadequate Medicaid reimbursement rates.
Who is the claims agent in the Whitehall Trust bankruptcy?
Omni Agent Solutions is serving as the claims and noticing agent for these jointly administered cases. Stakeholders with questions can contact Omni Agent Solutions through the case administration website.
