Shambhala Mountain Center Files for Chapter 11 Bankruptcy Protection
the Shambhala Mountain Center in Larimer County filed for Chapter 11 bankruptcy this week as it restructures debt following pandemic-induced financial difficulties, the Shambhala Buddhism sexual misconduct scandal and the Cameron Peak fire.
The bankruptcy filing, filed Monday in federal court in Denver, follows the Buddhist retreat’s announcement last month that he is change its name to Drala Mountain Center after becoming an independent non-profit organization.
The center near Red Feather Lakes encountered financial difficulties in early 2019, in part due to shortfalls in program revenue caused by cancellations due to COVID-19 closures and the âcrisis in the greater community of Shambhala,â according to a press release. Release.
The 2020 Cameron Peak Fire, the largest wildfire in Colorado’s recorded history, further hampered the center’s ability to generate revenue after a number of buildings and other infrastructure were destroyed.
According to its Chapter 11 filing, Shambhala Mountain Center and Wells Fargo Bank entered into a restructuring agreement on July 29, 2015, which consolidated all of the center’s outstanding debt into one secured loan of 4, $15 million. Wells Fargo commissioned an appraisal of the core real estate in the center and valued the property at $7.7 million, according to a document dated Dec. 10, 2020.
In May 2021, Wells Fargo sold the Shambhala Mountain Center secured loan to RH Fund XXII LLC, a manager of âdistressed debt funds,â according to the Louisiana Bankruptcy filing.
The new debt holder did not agree to a request from the Shambhala Mountain Center to restructure the debt, leading to the filing of a protected bankruptcy reorganization case, according to the organization’s press release.
As part of the Chapter 11 filing, the Shambhala Mountain Center has a matching donation commitment of $500,000 from the Pema ChÃ¶drÃ¶n Foundation, according to the press release. Other major donors have committed over $250,000 to the reorganization. The center is represented on a pro bono basis by Ropes & Gray, a global law firm.
The renamed Drala Mountain Center, or DMC, plans to continue operating at its Red Feather Lakes campus during the reorganization and expects the Chapter 11 process to be completed in about six months.
“We recognize the important role DMC plays in the lives of so many people, especially during these trying times when people are seeking restoration, refuge and inspiration,” executive director Michael Gayner said in a statement. “We look forward to fulfilling our mission of bringing people together to experience wisdom in the weeks and months to come, and for years to come.”
Shambhala, the Boulder-born Buddhist community now headquartered in Canada, was embroiled in scandal in 2018 following the publication of a report by a group called Buddhist Project Sunshine which brought sexual abuse allegations against Shambhala leader Sakyong Mipham Rinpoche, who eventually resigned from his post. Third-party investigations commissioned by Shambhala have corroborated some of these claims.
A suite Denver Post survey found that Shambhala and its leaders had a decades-long history of suppressing allegations of abuse, including child molestation and cleric abuse, through the organization’s own internal processes.
Some of these accusations directly implicated the Shambhala Mountain Center, including allegations that center officials ignored calls for help. In 2018, the Larimer County Sheriff’s Office opened a criminal investigation in allegations of sexual misconduct by people connected to the center, although this case was closed in 2020 free of charge.
Following the publication of the Post’s investigation, leaders of the Shambhala Mountain Center issued a statement apologizing for their failure to appropriately address sexual misconduct and abuse at the meditation center.
In June 2020, Michael Smith, former member of the Boulder Shambhala Center, pleaded guilty to first-degree assault and attempted sexual assault of a child and was sentenced to 20 years in prison. Prosecutors alleged Smith sexually abused a girl – whom he met in the Shambhala community – on multiple occasions beginning in 1997.
Separate charges of sexual assault against a former Boulder Shambhala Center teacher have been filed. dismissed in October 2021.