The sprawling Banning Lewis Ranch, whose owners sought bankruptcy protection last year, could be sold at the end of June under a plan the owners have proposed to a Delaware bankruptcy judge.

A motion filed last week by the owners lays out a process and schedule for the sale. Depending on who’s interested in the property, it could be sold to a group that has been created by some of the ranch’s current investors or put up for auction if additional buyers emerge.

The sale plan is subject to approval by the bankruptcy judge; objections are due next Wednesday and a court hearing on the proposal is scheduled May 18.

The owners’ proposal is the latest development in the bankruptcy of the 21,500-acre ranch, which makes up most of Colorado Springs' east side. The property is bounded roughly by Woodmen Road, Fontaine Boulevard and Marksheffel and Meridian roads.

Because of its massive size, much of the Springs’ growth over the next several decades is expected to take place on the Banning Lewis Ranch. As originally envisioned by its owners, the property’s development would include 75,000 residences, 180,000 people and 79 million square feet of commercial space — about the size of some small cities.

According to last week’s motion:

• A so-called “stalking horse purchaser,” controlled by ranch investors, has submitted an offer to buy the ranch property. In bankruptcy terms, a “stalking horse” bids on a bankrupt company’s assets so that owners can establish a minimum price and avoid low-ball offers. No other offers have been received that would pay off secured claims against the bankrupt owners or repay their obligations related to financing they’ve received during bankruptcy proceedings, the owners’ motion says.

• Eastdil Secured LLC, a New York-based real estate investment banking company hired to solicit bids on the property, began marketing the land in mid-January. It sent marketing materials to more than 1,400 investors representing 900 companies, the owners’ motion states. “Eastdil has been in contact with at least 100 potential purchasers, at least 40 of whom have signed confidentiality agreements, and some of whom have expressed an interest in bidding on the property,” the motion states. It describes the interested parties as “largely institutional and (which) consist primarily of private equity funds, opportunity funds, land bankers and regional homebuilders and community developers.” None of the interested parties were identified.

• The motion proposes a June 23 deadline for bidders, a June 28 auction, a June 29 sale hearing and a closing June 30.

Two California-based limited liability companies that own the property — Banning Lewis Ranch Co. and subsidiary Banning Lewis Ranch Development I & II — filed Chapter 11 bankruptcy petitions in October, citing more than $242 million in debt.

The city annexed the ranch in 1988, which then went through several sets of owners before development finally began in 2007. As the economy went into recession that year, and the housing market began to tank, revenues from the sale of home sites fell far below projections and the value of the property as loan collateral declined, according to bankruptcy documents filed by the owners.

By September 2010, KeyBank, an Ohio-based banking giant that heads a group of lenders who were owed $65.5 million, said it would no longer extend a loan or refinance the debt, court documents say. Two other investors owed nearly $148 million, Greenfield BLR Partners and Farallon BLR Investors, also refused to continue to fund the owners via loans or additional equity contributions, court documents state.

With no other financing available, the owners filed for bankruptcy protection Oct. 28, according to court documents.