Back in 2014 DeArbor LLC, the Owners of Pineland Cemetery,  were forced into a bankruptcy proceeding by creditors seeking to force a liquidation of their assets and collect on outstanding mortgage debts,  among other outstanding liabilities.

DeArbor owned 4 cemetery properties in Alabama, including a property in Centreville,  Tuscaloosa, Cullman, and Tuscaloosa. According to court filings they owed a first mortgage debt of $1,180,650. and a second mortgage debt of $579,928.

On April 30, 2019 the U.S. Bankruptcy Court, Northern District, Western Division entered an Order of Dismissal in the Chapter 11 Bankruptcy,  dismissing the case and DeArbor LLC. Pineland is now owned outright by the original first mortgage holder, an equity firm out of Utah. The present owner has no connection to DeArbor other than having been an unpaid creditor. Locally, the property is still being managed by Peggy Danaher [Tuscaloosa], the same person who has managed the cemetery during the past five or more turbulent years.

The bankruptcy trustee, Robert Morgan of the Rosen Harwood law firm in Tuscaloosa told The Bibb Voice that since the bankruptcy proceeding began, no representative of DeArbor ever responded to the bankruptcy petition or showed up for any hearing in the case.

Morgan worked closely with the Alabama Department of  Insurance  during the five years he acted as trustee in this case. It became clear that DeArbor sold pre-need contracts and failed to comply with Alabama law in the process. An adequate portion of the pre-need proceeds was not deposited in trust for the clients, rather it was diverted to the use of DeArbor, and as a result those holders of unfulfilled pre-need contracts have now lost their contract rights or benefits as a result of the bankruptcy. The dark history of the DeArbor operation is worth examining in more detail.


Excerpts taken from the Trustee’s Report to the Bankruptcy Court

Much of the cemetery and funeral home business is fueled by the sales of pre-need contracts and grave space sales. A customer goes to one of the business sites and makes final arrangements so as to not to burden their family. The customer can purchase the grave space and also prepay for the costs associated with the cemetery/funeral merchandise and services. Since this can entail considerable expense, financing over an extended period of time is made available.

In 2002 the Alabama legislature passed laws pertaining to the duties a cemetery owner/ funeral home operator owes to a preneed contract customer once payments are made for merchandise such as vaults and headstones and services such as opening and closing of the grave. A certain percentage of the amount paid is required to be placed in trust in an institution over which the owner/operator has no control. Grave spaces are not considered preneed sales of cemetery services and merchandise, therefore funds for grave spaces are not required to be placed in trust.

The Trustee discovered in the beginning that the Debtor had operated fairly within the bounds of the preneed state law. It employed numerous salespersons to solicit and sell preneed contracts, especially for the Tuscaloosa property. But when large monthly sums of money began coming in, those funds were not properly placed in trust.

The Trustee made several visits to the State of Alabama Department of Insurance, Preneed Section in Montgomery Alabama. He discovered that the department had performed several examinations on the Debtor pursuant to Ala Code §27-17A-15, beginning January 27, 2011. It was determined that the Debtor had failed to pay the appropriate amounts into the Debtor’s preneed trust account. After giving the Debtor ample time to make up the non-trusted amounts, a Cease and Desist Order was issued by the Department on September 18, 2013, forbidding the Debtor from selling future preneed sales. After this Order was entered, it appears the principals of the Debtor lost interest in operating the business and things began to wind down, with skeleton staffs attempting to operate the four properties on a shoestring budget.

The Trustee was concerned whether there might be criminal liability regarding the improper trusting of preneed contract funds by the principals of the Debtor. Numerous banker boxes were organized with this documentation. The Trustee met with the Tuscaloosa County District Attorney, members of the State of Alabama Department of insurance, Preneed Section, and State insurance investigators at the Trustee’s office on September 30, 2014.

These banker boxes were turned over to these individuals at the close of that meeting. Trustee does not know what further actions were taken by any authority. In 2014, in an attempt to combat the non-trusting of such preneed funds, the Alabama legislature amended the state law for all post 2014 contracts to carry criminal liability for such non-trusting of funds by cemetery and funeral home owners/operators.

End Excerpts


BY 2019 Morgan did identify about $200,000 of DeArbor deposited funds being held in trust in a Florida bank and attempted to unlock those funds in the bankruptcy proceeding but was rebuffed on a challenge of not having sufficient legal standing. Fairley McDonald of the Alabama Department of Insurance plans to mount a challenge to try to claim those funds on behalf of stakeholders who purchased pre-need contracts. If he is successful those who hold pre-need contracts may be able to file claims in the future.

If you have been receiving any mail from the bankruptcy court about the DeArbor case you will continue to be notified of future activity, including anything that might happen with the Alabama Department of Insurance.

If you are a lot owner at Pineland you can still obtain information about your internment rights at Pineland by contacting Peggy Danaher 205 242-8850.

In summary, if you are the holder of a pre-need contract purchased from DeArbor LLC you might want to file that for safekeeping with your Confederate stock certificates. If you hold a Deed of Internment Right (a gravesite) you still own a lot at Pineland and may be buried there but you will have to pay again for opening/closing services of the grave and work with a funeral provider to get there.

DeArbor LLC has tarred the image of an industry and done permanent damage to the reputation of an entire class of good people who give comfort and peace to our society. We all depend on the funeral industry at a time of mourning and grief, the time when we are burying loved ones and are often at our most vulnerable moment in life. We appreciate the good people who remain in the business in Bibb County that we can still depend on when that time comes for each of us.

Here’s hoping that you never encounter business people of the sort that run their business the way that DeArbor LLC did in the State of Alabama.

Any Opinions expressed in this article are those of the Author and are not necessarily the views of The Bibb Voice or its publishers.