Big ‘W’ for builder
Judge OKs hotel tower’s bankruptcy exit
By Thomas Grillo | Tuesday, November 15, 2011 |
http://www.bostonherald.com | Real Estate
The developer of the W Boston Hotel and Residences won court backing yesterday to exit bankruptcy, but it still must unload 71 unsold condos in the Theater District luxury high-rise to settle its debts.
U.S. Bankruptcy Court Judge Joan Feeney approved SW Boston Hotel Venture’s reorganization plan over strong objections from top creditor Prudential Insurance, which had ponied up more than $181 million for the project.
“(The ruling) will allow all of our creditors to get paid in full,” Carol Sawyer Parks, CEO of SW Boston and daughter of Hub taxi magnate Frank Sawyer, said in a statement.
SW Boston built the 123-unit condo and 235-room hotel tower in October 2009, but went bankrupt in April 2010 after struggling to sell condos and keep cash flowing into the Stuart Street project.
Prudential tried to foreclose on the 26-story glass structure last fall, but Feeney rejected that bid along with the company’s opposition to the reorganization plan. Prudential attorney Emanuel Grillo could not be reached for comment.
Using proceeds from condo sales over the next three years, SW Boston will first pay back the $52 million it still owes Prudential, then repay its $10 million loan from the city of Boston along with lesser amounts of money owed to other creditors, according to the reorganization plan.
SW Boston said it has sold 52 units and has another eight under agreement. Feeney noted the developer managed to sell 22 units, netting nearly $25 million, during an eight-month stretch amid the bankruptcy proceedings.
“The credible evidence submitted at the confirmation hearing compels a finding that the (reorganization) plan is feasible,” she wrote in her 50-page ruling. “The projections for the sales of condominiums are realistic and workable.”
In June, as part of its financial overhaul, SW Boston sold the hotel to an affiliate of Pebblebrook Hotel Trust for $89.5 million.
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