On April 11, 2014, the United States Court of Appeals for the
First Circuit rendered an important decision regarding the
long-running bankruptcy case of SW Boston Hotel Venture LLC
("SW"), the developer of the W Boston Hotel. This
Advisory focuses on two key rulings made by the First Circuit: (i)
when an oversecured creditor's claim
for post-petition interest in a debtor's chapter 11 case begins
to accrue and (ii) how such post-petition
interest should be calculated in the instances where it is due. A
copy of the full decision is available here.
W Hotel – Financing Difficulties and Chapter 11
Relief
Four years ago, in April 2010, SW failed to make a mandatory
quarterly payment to its senior secured creditor, the Prudential
Insurance Company of America ("Prudential"). Shortly
thereafter, SW and certain affiliates sought chapter 11 protection
in the United States Bankruptcy Court for the District of
Massachusetts. In addition to its obligations to Prudential under
