Cliffside Lodge II Council of Co-Owners, Inc. is operating under a court-approved Section 363 sale framework, with stalking-horse bids due June 22, 2026 and an auction set for July 27, 2026, as the central mechanism of a Subchapter V wind-down. The non-profit association manages a 24-unit timeshare condominium—1,248 interval weeks—in Fairfield Bay, Arkansas, and filed its voluntary Subchapter V petitionDkt. 1 on February 11, 2026, alongside four affiliated Fairfield Bay associations that are administered together under the Mountain Ridge lead case.
The filing followed a deteriorating operating and capital profile. Occupancy at the property fell to roughly 35.9% in 2025, while a 2025 reserve study identified approximately $1,687,518 in required repairs and renovations for 2026 alone—far exceeding the budgeted annual reserve contribution of roughly $270,000. The Debtor carried no secured debt and only about $34,727 in prepetition tax obligations, but the widening capital gap and declining interval-owner usage led members holding roughly 74% of voting interests to authorize the Chapter 11 filing in September 2025 (99.77% in favor); operations were suspended effective December 27, 2025. Declaration of Joey AlkireDkt. 8
The restructuring now turns on a coordinated, free-and-clear sale of the five associated properties. On May 29, 2026, the court entered an order approving auction and bidding proceduresDkt. 120 authorizing a stalking horse, a 5% good-faith deposit (raised to 10% for the successful bidder), expense reimbursement up to $100,000, and a break-up fee capped at 3% of the stalking-horse bid. Qualified bids are due July 20, 2026, followed by a virtual auction on July 27, 2026; association members retain Section 363(i) match rights subject to the same bidding requirements.
On cash management, the court granted in part the Debtors' motion to continue using existing bank, investment, and reserve accounts, waiving Section 345(b) for the investment and reserve accounts, as reflected in the BNC certificate of mailingDkt. 127 of the June 3, 2026 order entered after a contested hearing. A Subchapter V plan of liquidation has been filed, but no confirmation order or effective date has been docketed. The near-term milestones are the stalking-horse designation (June 22, 2026), the bid deadline (July 20, 2026), and the auction (July 27, 2026), which will determine the sale price funding the liquidation distribution to interval owners.
