Laurel Ridge Townhouses Property Owners Association, Inc. is pursuing a Chapter 11 sale of its 68-unit timeshare property in Fairfield Glade, Tennessee, followed by distributions and dissolution. The proposed transaction would include interests held by non-debtor owners as well as the association’s own holdings. Those steps are the debtor’s stated strategy and remain subject to court authorization. First-day declaration, pp. 7, 24–25
The association’s original September 8, 2026 schedules reported $3,406,505.75 in liabilities, including a $3,395,556.91 secured claim for First Horizon. These are historical scheduled amounts, rather than allowed claims or established recoveries. September 8 schedules, pp. 2, 13 The frozen docket research identifies an October 8 replacement-document record for those schedules but provides no replacement figures. The September 8 totals remain unreconciled with that record and should not be treated as verified current balances.
The filings also leave First Horizon’s secured status and collateral scope unresolved. The first-day declaration denies that the debtor carries secured debt while describing a loan that purports to be secured; the later schedules classify the bank’s claim as secured. These inconsistencies matter when assessing which assets might support administration and distributions. First-day declaration, pp. 25–26September 8 schedules, p. 13
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The October 9 certificate of service records continued service of notice of the debtors’ request for auction procedures and sale authorization. It establishes notice of requested relief, rather than approval or completion of a sale. Supplemental certificate of service
Laurel Ridge Townhouses Property Owners Association, Inc.
Court
U.S. Bankruptcy Court for the Middle District of Tennessee
Case Number
26-03738
Petition Date
August 4, 2026
Case Snapshot
The petition identifies the debtor, venue, case number, and filing date. An August 20 request states that Laurel Ridge elected Subchapter V in its original petition and asks the court to correct an apparent intake designation as an ordinary small-business case. That request describes a correction to the docket designation, rather than a new election; it does not establish that the requested correction was granted. Petition, pp. 1–2Designation correction request
The proposed sale reaches beyond the association’s holdings
According to the first-day declaration, Laurel Ridge comprises 11 residential buildings with 68 furnished units. Fifty-two units are committed to interval ownership and 16 to undivided ownership. The association itself owns 104 interval Unit Weeks, approximately 3.85% of that ownership category, and approximately 1.42% of the undivided ownership interests. These are separate ownership categories; neither percentage represents ownership of the entire property. First-day declaration, pp. 7, 11–14
The declaration describes the association’s intended use of section 363(h) to seek a judgment, by consent or otherwise, authorizing a joint sale of its interests and those of association members. The contemplated relief also includes selling free and clear of member interests, with those interests attaching to proceeds, and terminating or amending the timeshare plan at or before closing. The declaration reserves the possibility of litigation against members to obtain the requested relief. First-day declaration, p. 24
The association said it would consider offers for Laurel Ridge alone or together with properties governed by the other associations. Its intended exit includes distributing net proceeds after administration and sale costs under a confirmed liquidation plan or other court order, resolving claims, and dissolving the association. Possible member distributions may be subject to offsets for delinquent maintenance fees or special assessments. These are proposed transaction and distribution terms, rather than established recoveries. First-day declaration, pp. 24–25
First Horizon dominates the original scheduled debt
The original September 8 schedules place nearly all reported liabilities in First Horizon’s secured claim. The figures below describe that filing only and remain subject to the replacement-record limitation noted above. They are scheduled amounts, rather than allowed claims or payments. September 8 schedules, pp. 2, 13
Liability category
Original September 8 scheduled amount, USD
First Horizon secured claim
$3,395,556.91
Priority unsecured claims
$9,580.84
Nonpriority unsecured claims
$1,368.00
Total liabilities
$3,406,505.75
Original September 8 Scheduled Liabilities — Unreconciled with Replacement Record
The loan predates bankruptcy. The declaration describes a March 13, 2025 non-revolving facility permitting up to $5 million outstanding and reports $3,395,556.91 in principal as of June 30, 2026. The $5 million facility limit is distinct from the reported outstanding balance. First-day declaration, pp. 25–26
The declaration states, “As of the Petition Date, Debtor carries no secured debt.” Yet its subsequent loan discussion describes a purported security interest in assessments, maintenance fees, and payment rights. The September 8 Schedule D then lists First Horizon’s $3,395,556.91 claim as secured. The declaration’s denial is inconsistent with its own loan discussion and the later schedule; the supplied evidence does not resolve the loan’s legal status. First-day declaration, pp. 25–26September 8 schedules, p. 13
The collateral descriptions also require reconciliation. Schedule D describes cash and real property as subject to First Horizon’s lien, with collateral value undetermined. The first-day declaration instead describes collateral including non-reserve assessments, maintenance fees, and other payment rights, and reports that the security agreement excludes rights in the debtor’s real or tangible personal property. Neither filing adjudicates the lien’s scope. September 8 schedules, p. 13First-day declaration, p. 26
The declaration also states that the association would not use funds in its two First Horizon loan accounts without an agreement with the bank or court authorization. That stated restriction, together with the conflicting secured-debt and collateral descriptions, leaves uncertainty about which funds could support administration and distributions. First-day declaration, pp. 25–26
Repair costs and suspended occupancy frame the exit
The declaration attributes the property’s difficulties to declining occupancy and needed repairs, capital improvements, and renovations. It reports approximately $14.476 million in estimated expenditures from 2025 through 2032 under the reserve study. That amount is a multiyear capital-needs estimate, rather than scheduled debt or a sale valuation. First-day declaration, p. 16
At the October 9, 2025 membership meeting, with 71.89% of voting interests represented, members authorized the board to pursue bankruptcy and a sale, subject to court approval. The resolutions also authorized suspension of 2026 occupancy and maintenance-fee collection, while reserving rights to resume collection. By the first-day declaration, the board and property manager had suspended occupancy. The authorization to suspend fee collection did not waive the association’s right to seek those fees later. First-day declaration, pp. 22–24
The August 5 joint-administration order directs joint filings to the Glade at Nottingham Villas lead case, No. 26-03736. It expressly preserves substantive creditor rights and makes no determination about substantive consolidation or future distributions. Laurel Ridge’s October service filings document notice of a bid-procedures hearing order and the requested auction and sale relief. Joint-administration order, pp. 2–3October 6 certificate of service, pp. 1–2October 9 supplemental certificate
The debtor’s proposed exit ends with a sale, allocation of net proceeds, and dissolution. Its declaration makes those steps subject to court approval and distribution under a confirmed liquidation plan or other court order. The proposed treatment of co-owner interests and the conflicting descriptions of First Horizon’s claim remain central to assessing possible distributions; the original September 8 debt totals alone do not establish recoveries. First-day declaration, pp. 24–26
Sources
First-day declaration, pp. 7, 24–25 /documents/3f6817e8-859a-44c1-ba74-94d65260847b/
September 8 schedules, pp. 2, 13 /documents/eee46c09-a4c1-4bef-a2db-f34764b54877/
Supplemental certificate of service /documents/5a550f25-ccb6-4536-b8c9-a0c9bc0981d0/
Petition, pp. 1–2 /documents/2b5988e2-1538-404a-9421-5907345b27c7/
Joint-administration order, pp. 2–3 /documents/629ddfd5-b278-40a4-9afb-58ca8860ca9c/
October 6 certificate of service, pp. 1–2 /documents/11f5a204-d0c0-4b18-a86b-2377515a6521/
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.