Trending publication

Massachusetts Lawyers Weekly publishes “1st Circuit’s W Hotel ruling resolves key bankruptcy issues” by John Loughnane

Print PDF
| Article

John G. Loughnane, a partner in the Business Department, published “1st Circuit’s W Hotel ruling resolves key bankruptcy issues” in Massachusetts Lawyers Weekly on May 1. The article discusses the 1st U.S. Circuit Court of Appeal’s recent important decision regarding the long running bankruptcy case of SW Boston Hotel Venture LLC, the developer of the W Boston Hotel. The ruling resolves when an over secured creditor’s claim for post-petition interest begins to accrue and how such post-petition interest should be calculated in the instances when it is due. Lenders and borrowers will find the decision critical in helping to set effective strategies in their negotiations over distressed financings.

John notes the 1st Circuit’s opinion is noteworthy for its detailed discussion of the issues impacting a secured lender arising from the financing of a significant real estate development. After the developer sought Chapter 11 relief, the lender was unable to convince the bankruptcy court to grant relief from stay to allow the lender to foreclose. Instead, the developer continued developing the project under the protection of Chapter 11, creating value that ultimately will be used to pay not just the senior lender but also the city of Boston as junior lender and other constituents. John also points out that the litigation leading to the 1st Circuit decision reveals the uncertainty that can exist in any bankruptcy context and that the 1st Circuit’s decision should be mandatory reading for any lender or borrower embarking on loan workout discussions.

More Publications >
Back to Page