BOSTON-US bankruptcy court Judge Joan Feeney ruled in favor of the W Hotel & Residences here, allowing them to continue with the marketing and sale of luxury condos attached to the property. As a result of the ruling the W Hotel will be able to submit its plan for reorganization and attempt to repay its debtors.
This ruling, as well, prevents Prudential Insurance Co. from foreclosing on the property. Prudential had loaned $192 million to the developers of the W, SW Boston Hotel Venture LLC, in January of 2008. In 2010, the W filed for Chapter 11 bankruptcy and Prudential proceeded to court in an effort to foreclose on the property.
Feeney noted that SW Boston was “moving in a meaningful direction” and was confident in the potential of its success within a “reasonable” amount of time. Based on evidence presented by the company’s experts, SW provided proof of a positive cash-flow and that the Boston condominium market may be turning positive. Attorney Harry Murphy of Murphy & King, which represented the SW Boston in the proceedings, tells GlobeSt.com that "both the hotel and the condominiums were subject to separate appraisals. And the appraisers used several different methods to use on the income approach…That was all subject of testimony from our experts."
Regarding the sale of the property, Murphy notes that there is an exclusive marketing agent who is continuing to market and sell the condominiums at the W, which range from around "$900,000 to $3 million-plus." The city of Boston also provided $10.5 million, of which the developers are still on the hook for $6 million. Murphy says that the W will attempt to file its reorganization plan in March.
As for Prudential, "There's still no settlement with Prudential, so we're still going to have to go through the confirmation process with them," explains Murphy. Prudential was contacted by GlobeSt.com for comment, but they did not return inquiries by deadline.
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