A Canary in the Coal Mine? Focused Behavior Solutions Files Chapter 11

WALLA WALLA, WASHINGTON – Focused Behavior Solutions, LLC, an ABA provider whose website lists clinics in Walla Walla and Lincoln, Nebraska, filed for Chapter 11 bankruptcy on October 8 with $383 in the bank, $168,000 it has billed but not yet collected, and $529,000 in debts, according to its petition in the U.S. Bankruptcy Court for the Eastern District of Washington.

The schedules show four merchant cash advances taken on between June 2025 and April 2026, three of them with owner Rachel Pope listed as a co-debtor, the term for someone who is also liable for the debt, alongside unpaid payroll taxes, back rent, and wages owed to 17 employees. Revenue fell 12% in 2025 and is running about a third below 2024’s pace this year.

The company chose Subchapter V, the small-business track of Chapter 11 for companies with less than about $3.4 million in debt. It lets Pope keep running the company while a trustee helps her negotiate a repayment plan with creditors. She signed the petition as owner and managing member and checked the box saying there should be money left over for unsecured creditors.

The asset side is thin. Of $172,884 in listed assets, $168,351 is receivables 90 days old or less. Another $24,630 in older receivables is deducted in full as doubtful and valued at zero. Furniture and equipment, including therapy tools, toys, kids’ tables, and used iPads, come to $4,150. The patient list and a set of workflows the schedule says could be used by AI companies are listed at unknown value. Its bankruptcy lawyers also hold about $8,700 of a $20,000 retainer in their trust account, money the schedules list separately at an unknown value.

Who Is Owed What

The debts fall into three piles. Four debts the company’s schedules label merchant cash advances, financing repaid out of a business’s future receipts, total $178,372: Headway Capital ($96,793), Funding Metrics Services ($29,016), Flash Funding Servicing ($27,563), and Mint Funding ($25,000). Three of the four were taken on in the first four months of this year; the Headway balance dates to June 2025.

The company lists the four as secured claims but values the collateral behind them at zero, so the same four balances also appear in full on its list of its 20 largest unsecured creditors. Pope is the listed co-debtor on the Headway, Funding Metrics, and Flash Funding debts, which together come to $153,372.

Receivables are 97% of the company’s listed assets. The four lenders behind the cash advances are owed more than all of those assets combined.

Priority claims, which get paid ahead of ordinary creditors, total $223,074. The schedules list $140,780 in 2026 payroll taxes owed to the IRS, $26,511 owed to the Washington Department of Revenue, and $55,782 in unpaid wages to 17 employees, several of them at Spokane-area addresses. The largest single wage claim is $10,667. The company lists the priority portion of the $140,780 as unknown, and it lists the IRS amount as unknown on the same top-20 list, yet the filing’s summary page counts the full amount as priority debt.

The remaining $127,453 is ordinary unsecured debt. The biggest piece is a $54,226 JPMorgan Chase credit card balance. The rest is $27,440 in back rent owed to United Food and Commercial Workers Local 3000, the union the company rents its Spokane building from; $16,917 in back rent on the Lincoln clinic; $16,797 in Premera insurance premiums; $8,878 in fees to the law firm Littler Mendelson; and $3,196 to a security contractor.

Revenue, Repayments, and the Spokane Address

The company reported $3.59 million in revenue in 2024, $3.16 million in 2025, and $1.82 million from January 1 through the filing date, which works out to roughly $197,000 a month this year against about $299,000 a month in 2024.

In the 90 days before it filed, the company paid the four lenders $81,128, roughly 14% of what it took in over a typical 90 days this year. The payments to Mint Funding alone, $31,248, exceeded the $25,000 the lender is still owed.

The filing does not make clear what happened to the company’s Spokane location. The statement of financial affairs lists 1719 N. Atlantic St. as a previous address, with the dates 2023 to October 5, 2026, three days before the petition. The same table also lists the Lincoln clinic’s address, with no dates, while the company’s website still lists the Lincoln address. The lease for 1719 and 1727 N. Atlantic St. remains on the schedule of contracts, the union landlord is among the creditors owed back rent, and the company’s Facebook page still gives the Spokane address.

The Spokane Journal of Business reported in August 2023 that the company had leased 5,800 square feet at 1719 and 1727 N. Atlantic St., space the union had occupied, and was moving there from 157 S. Howard St.

A Ten-Year-Old, Owner-Run Practice

Pope formed Focused Behavior Solutions in Idaho in October 2016 and ran it from Priest River, Idaho, before opening a Spokane office in 2019. Federal provider records and her LinkedIn profile list her as a BCBA with a master’s degree in applied behavior analysis from Ball State University. Idaho records show the 2016 registration was administratively dissolved in January 2019 and that a second Idaho LLC of the same name was formed in July 2020; the bankruptcy filing does not say which one is the debtor. She owns all of it. Federal provider records list her as the company’s owner, and the petition gives her 100% of the equity. Provider directories in Washington and Nebraska say the clinics take Medicaid and private insurance.

The filing enters 1,400 in a patient-count field meant for providers that offer meals and housing, while describing the business as entirely outpatient; it does not say what the number counts. It also lists Pope’s own transactions with the company over the year before filing: $133,305 put in, $166,256 drawn as distributions, and $23,461 in salary. Distributions and salary exceeded contributions by about $56,412, which the filing calls her total income from the company.

What Happens Next

Judge Whitman L. Holt granted all of the company’s opening requests at a telephone hearing on October 15; the docket shows: an interim order letting it keep using cash its lenders claim liens on, what bankruptcy calls cash collateral, and orders letting it keep its existing bank accounts and pay employees their pre-filing wages and payroll taxes. Those are the requests a company makes when it intends to keep operating through the case rather than liquidate. Pope appeared at the hearing. So did Subchapter V trustee Kevin O’Rourke, a Spokane attorney; the U.S. Trustee, the Justice Department office that oversees bankruptcy cases, named him to the case on the day of filing. Washington’s state taxing agencies asked the court the next day to be notified of filings in the case.

The declaration Pope filed October 13 in support of those motions, the document in which a company typically describes its business and the events that led it to file, is on the court’s paid docket and was not in the free RECAP archive on CourtListener when this article was prepared. A final hearing on the use of cash collateral is set for November 4, a creditors’ meeting for November 13 by phone, and a status conference for December 2; claims are due December 17. The company’s Subchapter V plan is due January 6, 2027.

AT A GLANCE

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