The Sweetwater development on Lake Koocanusa has entered foreclosure proceedings.

On Monday, June 6 in Cranbrook a Supreme Court judge gave a conduct of sale order, which is permission for the mortgage lender to list the property for sale. Profits from the sale go to repay the mortgage and the lender's legal fees.

Sweetwater is a 300-acre development at the junction of the Elk River and Koocanusa reservoir.

Once complete, it could include up to 890 building sites and 150 RV sites, a 700-slip marina, a community centre, swimming pools and a village square with restaurants, shopping and a health spa.

Developer Craig McMorran said there are 130 "preferred shareholders" in the development who have invested a total of $18 million. There are two mortgages on the property, totalling $8 million.

But McMorran said he plans to appeal Monday's judgement to halt the sale of the property.

"The appeal process will go in and that will stop that action until another court date, so that will hold it off for another month or two. In that time, I plan to go and replace the mortgages," said McMorran.

On Monday, May 30 in a Vancouver court, a judge ordered an end to McMorran's creditors' protection. There was one week between that court date and the foreclosure proceedings in Cranbrook, McMorran said, which wasn't enough time.

"We only had from Monday to Monday to get ready for this court case in Cranbrook. So we didn't get any of our affidavits filed, I couldn't find a lawyer in the area that wasn't in conflict," said McMorran. "I phoned seven lawyers and they were all in conflict."

Any lawyer who has previously done work for the developer, mortgage lenders or creditors is considered by the court to have a conflict of interest, he said.

"I finally brought a lawyer from Calgary who didn't know anything about the project. He had one day to catch himself up to speed," said McMorran. "The other side wouldn't agree to an adjournment so I could get the lawyer up to speed or get somebody proper and allow me to get my affidavits filed and so on."

McMorran plans to file an appeal within the next week based on these grounds, which would give him more time to put together alternative funding.

"Interesting to note is that the 130 preferred shareholders pledged the $3.5 million it takes to complete the project. As well, I have a new first mortgage that is going to go in place right away that is friendly and happy to see the construction of the project," said McMorran.