The Donald W. Wyatt Detention Facility in Central Falls, Rhode Island, has filed for bankruptcy protection as it seeks to restructure over $100 million in bond debt. The Central Falls Detention Facility Corporation, which oversees the prison located at 950 High Street, submitted a Chapter 11 petition in U.S. Bankruptcy Court for the District of Rhode Island on July 10. The corporation’s board approved the filing earlier in July during an executive session.

Established in 1993 under a state law that encouraged the formation of local detention facility corporations, the Wyatt facility was intended to generate economic growth while addressing the demand for inmate housing nationally. The facility expanded significantly in 2006, increasing its capacity to 782 detainees, primarily federal inmates and U.S. Immigration and Customs Enforcement (ICE) detainees, but this expansion came with a $106 million bond issuance. According to court documents, this debt load, now exceeding $167 million, has become unsustainable.

Daniel S. Polsky, the principal restructuring advisor for the detention facility, stated in court filings that while the facility maintains solid cash flow for current liabilities, its bond debt requires significant reduction to stabilize operations. The proposed reorganization plan aims to cut approximately $101.6 million, or about 60 percent, of the outstanding bond principal and interest. Polsky emphasized that the restructuring would allow the facility to continue normal daily operations, meet its obligations to bondholders, and maintain safe and humane conditions for detainees.

The restructuring process followed months of negotiations mediated in court, resulting in broad support from the key stakeholders: the detention facility’s board, consenting bondholders, and the City of Central Falls. The plan also includes provisions to restore and sustain financial contributions to the city. It calls for the facility to resume annual local impact fee payments of $250,000, which had been mostly delayed in recent years due to financial difficulties. The city received a payment of this amount in April, according to court filings. Additionally, the plan proposes a one-time reimbursement to the city of $400,000 and annual charitable donations of $25,000 to local nonprofits focused on public safety.

Central Falls Mayor Maria Rivera acknowledged that the city is beginning to receive the owed impact fees but criticized federal immigration policies that contribute to reliance on detention centers like Wyatt. A spokesperson for the detention facility said the restructuring will help “right-size” the facility’s financial obligations, improve its relationship with the city, and position it for continued operations supported by more than 250 correctional staff.