Business

Order authorizing sale of Cedars deals blow to depositors' hopes of refunds

By Bill Moss, Published: October 9, 2026

An order granting the chief lender's motion to put the Cedars Lodge & Spa development up for sale contains bad news for some 43 purchasers of luxury condominiums in the stalled project.

Forced into receivership by Fuse 10 LLC, the Florida-based finance company that made a $32 million construction loan for the project, the half-completed residential tower will now go on the market with a starting "stalking horse" bid of $36 million by the lender itself.

Acting on a motion by the purchasers, North Carolina Business Judge A. Graham Shirley appeared to snuff out the depositors claim that they would be owed refunds should the development sell.

"Condo purchasers oppose the Motion for Sale as presented by the Receiver because they argue that it effectively extinguishes any equitable lien rights that they may have to any potential proceeds from the sale," the judge wrote in summarizing the case.

In granting the receiver's motion to authorize the sale, Shirley set out the facts and reasons under the law why the condo buyers hold no valid equity claim.

“The Condo Purchasers knew at the time that the Construction Deposits were made that, unless they were rescinded within seven days as required by the North Carolina Condominium Act, those Construction Deposits would be used for construction," he said. "The fact that any of the PSAs may now be void due to rescission does not negate the Condo Purchasers’ knowledge of that fact.”

"The Court does not find any credible a credible argument under which the Condo Purchasers could establish a case for an equitable lien," he concluded. "Therefore, the best option for all interested parties and nonparties is to proceed with the sale procedures as proposed by the Receiver in the Motion for Sale."

The judge also noted: "The sale as proposed also puts the Condo Purchasers in no worse position with respect to any hypothetical lien rights than they were before any of the PSAs were rescinded, given the liquidated damages language of the PSAs."

Paul A. Capua, an Asheville attorney representing 20 condo purchasers, had argued in the business court hearing on Monday that the depositors had a valid claim to whatever proceeds would come from a sale of the project. Capua was not immediately available on Friday afternoon to respond to questions about the judge's order and the next steps for the condo purchasers.

Fifty-four people watched a hearing Tuesday morning, held virtually, including attorneys for the Cedars, lenders, depositors, the general contractor, subcontractors who have filed mechanics liens in court, the city of Hendersonville, and others. Most of the non-attorneys watching were people who had made substantial deposits for a luxury condo, generally at least $100,000 and often more than $250,000, according to court records.

William L. Esser IV, the attorney for the plaintiff in the case, lender Fuse 10 LLC, urged the judge during the hearing to approve the sale process that the lender and receiver had set forth.

"There are no parties who disagree that the property needs to be sold so it's just a question of how to sell it" — either via foreclosure or court-approved sale to Fuse for its "stalking horse" offer of $36 million, he said.

Fuse is covering the carrying cost of the land and building, Esser added, including $10,000 a month for insurance, while the Cedars is piling up interest debt of $650,000 a month. Fuse said in court records that the borrower has been in default since last Dec. 31.

A manager of Liberty Solutions, the court-appointed receiver, told the court earlier that the initial construction estimate was $68 million for the first seven-story building, called the Pisgah Tower. The team's evaluation estimated that the job was about 55% complete and would require $40 million to finish.

While developer Gregg Covin and the Shipman family, the Hendersonville partners in the project, pursued other financing options, none has come to fruition. An attorney for the Liberty Solutions told Judge Shirley on Monday that the receiver was notified on Aug. 18 “that all refinancing possibilities have fallen through."