First Circuit Reinstates Chapter 11 Plan Confirmation for SW Boston Hotel Venture, LLC and AffiliatesApril 15, 2014
In an important decision addressing questions of first impression, the Court of Appeals for the First Circuit reversed the Bankruptcy Appellate Panel, and reinstated the Plan of Reorganization for SW Boston Hotel Venture, LLC and its affiliates. In so doing, the First Circuit rejected a demand by Prudential Insurance Company for approximately $25 million in post-petition interest that would have derailed the Companies’ reorganization plan. The First Circuit held that Prudential was not entitled to “vacuum up” the value created from the Companies’ successful reorganization, and the money should instead be available to other creditors and the Companies’ shareholders who completed the development. Leading the effort from Murphy & King’s Bankruptcy and Financial Restructuring Group were Harry Murphy, Charles Bennett, and Ethan Jeffery. Mr. Murphy argued the appeal before the First Circuit, and Murphy & King represented SW Boston in the Chapter 11 reorganization.