Buckingham Seniors Lose Fight to Pursue Funds Before Bondholders

Senior residents of the former Buckingham Senior Living Community Inc. lost their push to be paid about $147 million—which they say largely represents their life savings—before bondholders are compensated in the company’s bankruptcy.

In what she called a “weighty decision,” Judge Michelle V. Larson of the US Bankruptcy Court for the Northern District of Texas at a hearing Friday denied motions from residents and an unsecured creditors’ committee for derivative standing to sue over the priority of payouts in the Chapter 11 case.

The ruling effectively prevents the seniors from moving forward with a lawsuit against lender and bondholder trustee ...