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 sexual-misconduct allegations as a trifecta of causes for its declaring bankruptcy.
It 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 features the Great Stupa of Dharmakaya and a Kami shrine for Japanese Shinto and has hosted visits by some of the most prominent figures in Tibetan Buddhism, including the Dalai Lama.
In the years before the COVID-19 pandemic, according to court documents, the center hosted an average of more than 10,000 visitors per year.
In 2018 and 2019, the center brought in $1.6 million and $1.3 million, respectively, in lodging revenue, for an average of about $120,833 per month. The pandemic forced the center to close from March 2020 through July 2021. Since it reopened, documents show, it has generated about $55,000 in lodging revenue per month.
Bankruptcy filings also cite the August 2020 Cameron Peak wildfire as a contributing factor. The fire broke out 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, sewer and electrical systems.
According to court documents, the center suffered about $1.9 million in property damage in the fire. It has since received insurance proceeds, in addition to about $480,000 in donations to help rebuild, 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 allegations of sexual misconduct against Sakyong Mipham Rinpoche, the spiritual leader of Shambhala International. The allegations included accusations that the center had mishandled reports of sexual abuse in the 1990s and 2000s. Rinpoche eventually stepped down from his position, and the center distanced itself from Shambhala International, but the damage was done.
“Although DMC took steps to address these issues directly and institute changes to its policies and procedures to prevent future sexual misconduct, DMC experienced a reduction in charitable contributions and participation in its programs, resulting in reduced program and lodging revenues,” the bankruptcy filing reads.
The center’s largest outstanding debt is a $3.86 million loan that was originally taken out from 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 in 2016. The maturity date was pushed back multiple times, the last being 2019. In 2019, Wells Fargo decided not to extend the maturity period but instead granted the center a forbearance through 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 ended Monday. During that period, the parties negotiated but “were unable to agree to terms of a restructured Wells Fargo loan.”
The end of the forbearance period, plus the inability to successfully conclude negotiations, led the center to file, according to court documents. A successful restructuring would allow the center to “continue its non-profit mission, remain a resource for its community, and benefit its creditors, volunteers, donors, program participants, and other stakeholders.”
The center will attempt to maintain a business-as-usual atmosphere during the bankruptcy case.
Representatives for the center did not respond to requests for comment.