Turning Points for Children (TPFC) and four affiliated Community Umbrella Agency (CUA) limited liability company debtors are in the final stretch of a Subchapter V case, soliciting an amended plan that would resolve abuse-related tort exposure through a settlement trust and channeling injunction, with a confirmation hearing scheduled for July 15, 2026.
The five-debtor group filed voluntary Subchapter V petitions on May 1, 2024 (Chapter 11 Subchapter V Voluntary PetitionDkt. 1), after winding down CUA operations at year-end 2023 contracted the organization from a $66.9 million budget and 507 employees to roughly $21 million and 135 employees. The First Day Declaration of Seth S. JonesDkt. 19 traces the filing to a combination of eight pending personal injury and negligence lawsuits tied to alleged abuse during CUA operations, claims-made insurance premiums driven by $10 million-plus settlements against other CUA providers, and approximately $3.5 million owed by the Philadelphia Department of Human Services for FY 2023-2024 CUA services. The case is jointly administered with Public Health Management Corporation identified as the corporate affiliate (Statement of Corporate OwnershipDkt. 4).
Liquidity has rested on TD Bank, N.A., which held a $4.0 million asset-based line of credit and a $782,000 term loan secured by the 415 S. 15th Street headquarters and receivables. TPFC opened with consensual cash collateral use under the First Day Cash Collateral MotionDkt. 13, later supplemented by a final DIP order approving a $4.4 million revolving facility from The Turning Points for Children Charitable Foundation; the former headquarters was sold for $2.75 million during the case to help fund the plan. Insurance-program obligations were stabilized through an interim order maintaining coverage postpetition ().
The restructuring endgame centers on an amended Subchapter V plan (in its May 4, 2026 solicitation version) implementing a global settlement of CUA Services Claims through a Settlement Trust funded by a $6.025 million insurance assignment from the Debtors plus $200,000 each from Public Health Management Corporation and the Foundation, with a permanent channeling injunction as the exclusive recovery source for CUA Services Claimants. The Plan Support Agreement, as clarified by the June 12, 2026 Notice of Errata Regarding Plan Support AgreementDkt. 778, terminates if a confirmation order is not entered by December 31, 2026. The court is concurrently cleaning up the claims register, having just sustained the Debtors' objection and disallowed two $125 million claims filed by Alejandra Bedolla Diaz in their entirety (Order Sustaining Objection to Claims C479-92 and C479-93Dkt. 782).
