Inspired Senior Living of Hamilton DST: Distribution Halts and Bankruptcy Filings
Banks Law Office has brought FINRA Arbitration claims against a broker-dealer regarding Inspired Senior Living of Hamilton DST.
For many investors, Inspired Senior Living of Hamilton DST was marketed as a stable, income-producing vehicle perfect for a 1031 tax-deferred exchange. However, recent developments—including a February 2, 2026, Chapter 11 bankruptcy filing—have left investors facing significant losses and an uncertain future.
If you invested in this Delaware Statutory Trust (DST) upon the recommendation of a broker or financial advisor, it is critical to understand your rights to recovery through FINRA arbitration.
The Collapse of the Income Promise
Launched in May 2022, the Hamilton, New Jersey property was a 195-unit senior housing facility. The offering raised millions in equity from accredited investors, and promised consistent annualized distributions.
The reality has been starkly different:
- Suspended Distributions: In mid-2025, Inspired Healthcare Capital (IHC) halted all investor distributions.
- SEC Investigation: The company confirmed it is under formal investigation by the Securities and Exchange Commission.
- Insolvency Allegations: Lawsuits have alleged that the sponsor was insolvent as early as late 2024, despite continued capital raises.
- Bankruptcy: On February 2, 2026, Inspired Healthcare Capital and its affiliated DSTs, including the Hamilton entity, filed for Chapter 11 bankruptcy protection.
Why This Matters to You: The Broker’s Responsibility
While the sponsor’s bankruptcy limits direct recovery from IHC, it does not prevent you from pursuing the brokerage firm that sold you the investment. Under FINRA Rule 2111 (Suitability) and Regulation Best Interest (Reg BI), brokers have a legal obligation to:
- Conduct Due Diligence: Did the firm ignore red flags regarding the sponsor’s financial health?
- Assess Suitability: Was a high-risk, illiquid DST appropriate for a retiree seeking stable income?
- Disclose Risks: Were you told this was “safe” while the broker pocketed high commissions (often totaling 12% or more in combined fees)?
The Path to Recovery: FINRA Arbitration
Many investors are now discovering that their portfolios were over-concentrated in IHC products. Unlike a traditional lawsuit that can languish in court for years, FINRA arbitration offers a streamlined path to seek damages from the broker-dealers who failed in their duty to protect you.
Note: While the bankruptcy court handles the restructuring of the property, your claim against your financial advisor is a separate legal path designed to recover your principal investment.
If you own interests in Inspired Senior Living of Hamilton DST or any other Inspired Healthcare Capital offering, the time to act is now. Please contact us today.