Former Shambhala retreat near Fort Collins files for bankruptcy
In documents filed Monday in U.S. Bankruptcy Court for the District of Colorado, the center – which changed its name from Shambhala in February – cites the COVID-19 pandemic, the Cameron Peak fire and a recent scandal involving allegations of sexual misconduct as a trifecta of causes for his declaration of bankruptcy.
He owes about $4.23 million, according to court documents.
The center was founded in 1971 to serve as a retreat center for mediation and practice in the tradition of the Kagyu and Nyingma lineages of Tibetan Buddhism. It is home to the Great Stupa of Dharmakaya and a Kami shrine for Japanese Shintoism and has hosted visits from some of the most important figures in Tibetan Buddhism, including the Dalai Lama.
In the years leading up to the COVID-19 pandemic, according to court documents, the center averaged more than 10,000 visitors a year.
In 2018 and 2019, the center brought in $1.6 million and $1.3 million in hosting revenue, respectively, averaging about $120,833 per month. The pandemic forced the center to close from March 2020 to July 2021. Since reopening, documents show, it has generated about $55,000 in lodging revenue per month.
The bankruptcy filings also cite the August 2020 Cameron Peak wildfire as a contributing factor. The fire started near Chambers Lake, about 25 miles southwest of the center’s location. The fire torched the center’s property in September, destroying 15 buildings and damaging water, sewage and electrical systems.
According to court documents, the center suffered approximately $1.9 million in property damage in the fire. He has since received insurance proceeds, in addition to approximately $480,000 in donations to help with the reconstruction, but the funds “are not sufficient to reimburse the DMC for the full cost of repairing all the damage.” .
Finally, court documents refer to the 2018 sexual misconduct allegations against Sakyong Mipham Rinpoche, the spiritual leader of Shambhala International. The allegations included accusations that the center mishandled reports of sexual abuse in the 1990s and 2000s. Rinpoche eventually resigned from his post and the center walked away from Shambhala International, but the damage was done.
“While DMC has taken steps to address these issues directly and make changes to its policies and procedures to prevent future sexual misconduct, DMC has experienced a reduction in charitable contributions and attendance at its programs, which has resulted in a reduction in program and accommodation revenue,” the bankruptcy filing reads. .
The center’s largest outstanding debt is a $3.86 million loan originally taken out with Wells Fargo Bank in 2005. The original value of the loan was $4.15 million. According to court documents, the loan was restructured in 2015 with a maturity date of 2016. The maturity date has been pushed back several times, the last being 2019. In 2019, Wells Fargo decided not to extend the period deadline but instead granted the center a forbearance until February 2021.
In May 2021, Wells Fargo sold the debt to Red Hills Holdings LLC, a distressed debt fund. Red Hills granted the center a forbearance that expired on Monday. During this period, the parties negotiated but “were unable to agree on the terms of a restructured Wells Fargo loan”.
The end of the forbearance period, along with the inability to successfully conclude negotiations, led the center to file a case, according to court documents. A successful restructuring would allow the center to “continue its nonprofit mission, remain a resource for its community, and benefit its creditors, volunteers, donors, program participants and other stakeholders.”
The center will try to maintain an atmosphere of status quo during the bankruptcy case.
Representatives for the center did not respond to requests for comment.