Most homeowners join an HOA expecting landscaping disputes and paint-color debates. In Todd Creek Farms, a 750-acre, 370-lot community west […]
Most homeowners join an HOA expecting landscaping disputes and paint-color debates. In Todd Creek Farms, a 750-acre, 370-lot community west of Brighton, Colorado, it turned into a Chapter 11 bankruptcy filing.
The dispute didn’t start with bankruptcy. It began in 2023 when 21 homeowners — roughly 5% of the community — filed a lawsuit alleging that a swap of two board members’ terms violated the HOA’s bylaws and code of conduct. That single procedural complaint opened the door to a much bigger fight over how the board was being run.
What the Lawsuit Actually Alleges
The core claim is a breach of fiduciary duty — the legal obligation a board owes to act in the community’s best interest rather than its own. The suit also claims the board failed to disclose required HOA records and mishandled its contract with Method Landscaping Services. According to homeowner attorney Peter Towsky, a board member personally benefited from that landscaping contract by well over $100,000, likely closer to $150,000. Court records reportedly show the HOA paid the landscaping company $219,000, including for redoing a trails project.
The board disputes the framing entirely. The board member at the center of the allegations, along with the HOA, denies wrongdoing and characterizes the plaintiffs as disgruntled homeowners upset about losing control of the board.
The Bankruptcy Twist
By mid-2025, legal fees had ballooned dramatically. The HOA reported paying roughly $900,000 to fight the lawsuit — an extraordinary sum for a community of this size. On July 15, 2025, the board filed for Chapter 11 bankruptcy protection. The HOA framed the move as a way to stop the financial bleeding, warning that continued litigation could force a special assessment on every homeowner to cover legal costs.
That’s where it gets contentious. Despite the filing, the HOA reportedly has more assets than liabilities, raising questions about whether the bankruptcy was filed in good faith. Homeowner Edie Apke, one of the named plaintiffs, described the experience bluntly: “It’s been frustrating. It’s been aggravating.” The HOA board pushed back publicly, telling residents the bankruptcy was a strategic move to end the lawsuit, not a sign of mismanagement or unpaid bills.
Why This Case Matters Beyond Colorado
Two numbers stand out for any homeowner researching HOA governance: separately, the HOA disclosed spending nearly $100,000 in unreimbursed legal fees over a two-year span responding to a series of homeowner lawsuits, and legal costs are typically drawn from the community’s common fund — meaning every homeowner, not just the plaintiffs, effectively pays for prolonged litigation. In an oil-and-gas-revenue community like Todd Creek Farms, rising legal costs directly reduce the payouts homeowners receive from those revenues, which is part of why the dispute escalated the way it did.
The larger lesson for HOA members nationally: bankruptcy filings by solvent associations mid-litigation are rare enough that legal experts flagged this case specifically as unusual. Attorneys tracking the case called it an exceptionally rare instance of a Colorado HOA filing for bankruptcy to escape legal bills from homeowner lawsuits.
FAQs
Is the Todd Creek Farms HOA lawsuit still ongoing?
Yes. The underlying civil suit remains active, and the bankruptcy court now has to determine whether the Chapter 11 filing was made in good faith or as a litigation tactic.
How many homeowners are involved in the lawsuit?
Reports place the number of named plaintiffs at 21 to 31 households out of the community’s 370 total lots.
Can an HOA use bankruptcy to avoid paying a lawsuit judgment?
Not automatically. Bankruptcy courts can dismiss filings found to be made in bad faith, especially when the filer has more assets than debts, which is one of the central questions in this case.
Who pays for HOA legal fees during a lawsuit like this?
Typically, all homeowners share the cost through the association’s common fund, regardless of whether they’re a party to the suit — which is part of why filings like this draw community-wide attention.
Where can homeowners find the actual court filings?
Case documents are publicly searchable through PACER under the HOA’s Chapter 11 filing, and a homeowner-run site (toddcreekfarms.info) has compiled the litigation timeline and exhibits.
