HOA Bankrupts After $1.4M Verdict for Dangerous Mold Crisis

BREAKING: The Highlands at Stonegate North Condominium Association in Parker, Colorado, has filed for Chapter 11 bankruptcy following a staggering $1.4 million court verdict due to severe mold issues affecting resident Kristina Corcoran. This urgent situation has unfolded after Corcoran’s home, once her “fairy tale home,” turned into a “dangerous nightmare” marked by toxic mold and health crises, as stated by Judge Robert Lung in his September ruling.

Corcoran, a 55-year-old former marathon runner, has experienced significant health complications from mold exposure since she first noticed water damage in her two-story townhome in 2017. The condo association and its management company, M&M Property Management, failed to address the issues for years, leading to worsening conditions, including rainwater infiltrating her home. Despite numerous complaints, action was only taken after she filed a lawsuit in 2022.

The verdict mandates the condo association to pay Corcoran $1.4 million, plus additional attorney fees estimated at $300,000. As of November, Corcoran began garnishing the association’s bank accounts, prompting the board to seek bankruptcy protection to safeguard its funds. In a court affidavit dated December 5, condo board president Sherri Rosselot confirmed that $1.2 million in funds are currently frozen due to Corcoran’s garnishment efforts.

Residents are expressing outrage over the management’s handling of the community, stating, “Our HOA’s bankruptcy filing shows how years of poor decisions and a lack of transparency have hurt our community,” according to resident Meredith Norton. Many homeowners feel sidelined by decisions made by a select few, which have now culminated in financial turmoil for the entire community.

The fallout from this case is far-reaching. Residents now fear for their property values and their ability to sell their homes. “It appears the HOA and management company feel like they are in absolute control and get to make terrible decisions that will negatively affect homeowners,” said resident Michener.

As the situation develops, all eyes are on the insurance companies believed to be responsible for covering the financial damages. However, the timeline for when these funds might be released remains uncertain.

This breaking news highlights the urgent need for accountability and transparency within homeowners’ associations across the nation. Residents are calling for a complete overhaul of the board to prevent future mismanagement. The community’s future hangs in the balance as the bankruptcy proceedings unfold and the impact of this ruling continues to resonate.

Stay tuned for further updates on this developing story that affects not just the residents of Highlands at Stonegate, but also raises critical questions about the governance of homeowners’ associations nationwide.