Aspen House DST Lawsuit: MRSC CO Investor Complaints After Bankruptcy
The White Law Group is investigating potential Aspen House DST lawsuit and investor complaint claims after the fund behind the Loveland, Colorado senior-living property filed for bankruptcy and the facility shut its doors. If you invested in MRSC CO Aspen House DST, here is what has happened to the property and what your options may be for recovering losses through FINRA arbitration.
What Is MRSC CO Aspen House DST?
MRSC CO Aspen House DST was a Delaware Statutory Trust private placement sponsored by Madison Realty Companies. The offering raised approximately $10 million from investors, many of whom were completing 1031 tax-deferred exchanges, to acquire Aspen House, an 80-bed assisted living and memory care community in Loveland. Orchard Securities was the selling broker-dealer of record on the fund’s 2017 and 2018 Form D filings.
Offering Terms
The trust targeted a 6.5% to 6.76% yield on master lease payments, with a minimum cash investment of $50,000 and a minimum 1031 exchange investment of $100,000. Investors reportedly stopped receiving distributions in 2020, well before the bankruptcy filing.
Aspen House Bankruptcy and Facility Closure
MRSC CO Aspen House LLC filed for Chapter 11 bankruptcy reorganization on September 10, 2024, in the U.S. Bankruptcy Court for the District of Colorado (Case No. 24-15323-JGR), after its lender began foreclosure proceedings. In March 2025, the facility closed abruptly, giving residents as little as 24 hours’ notice to relocate. The bankruptcy court later approved a sale of the property to a new owner.
Broker Due Diligence Obligations
Brokerage firms recommending private placements like Aspen House DST must follow Regulation Best Interest. That means researching the sponsor’s track record and financial condition before recommending the investment, not just after problems surface.
Risks of Private Placement DST Investments
DSTs like Aspen House carry risks that are often underexplained to retail investors, including illiquidity, high upfront commissions, dependence on a single property’s performance, and no investor control over management decisions. A property-level bankruptcy and abrupt closure like this one shows how directly those risks can hit investors who have no say in how the trust is run.
Recovering Investment Losses in Aspen House DST
If your broker recommended Aspen House DST without properly vetting Madison Realty or disclosing these risks, you may be able to recover your losses. The White Law Group represents DST investors nationwide and can evaluate your potential FINRA arbitration claim for free.
Contact The White Law Group
The White Law Group is a national securities fraud and investment loss recovery law firm with offices in Chicago and Seattle. If you invested in MRSC CO Aspen House DST, call us today at (888) 637-5510 for a free consultation, or contact us online.
Frequently Asked Questions (FAQs)
1. How do I file a claim to recover money I invested in Aspen House DST?
Most brokerage account agreements typically include a pre-dispute arbitration clause, so claims like this are usually filed and resolved through FINRA arbitration rather than in court. Arbitration can still result in a monetary recovery, and an attorney can review your account paperwork to confirm your options.
2. What are the risks of a DST like Aspen House, and why do they matter now?
DSTs are illiquid, carry high commissions, and depend entirely on one property’s performance, with no investor say in management decisions. When the underlying property fails, as happened when Aspen House closed and went through bankruptcy, investors have little recourse against the trust itself and often must look to the brokers who sold them the investment.
3. Can the brokerage firm be held responsible even though it didn’t run Aspen House?
Yes, a brokerage firm can be liable for failing to supervise the recommendation even if it never operated the property. Firms have a duty to vet sponsors like Madison Realty and disclose known risks before recommending a private placement to clients.
