Litigation: Assignment of voting rights held unenforceable
In April 2010, SW Boston Hotel Venture LLC and certain related entities filed for Chapter 11 bankruptcy.
January 26, 2012 at 04:00 AM
6 minute read
The original version of this story was published on Law.com
In April 2010, SW Boston Hotel Venture LLC and certain related entities filed for Chapter 11 bankruptcy. Prior to the Chapter 11 filings, Borrower was indebted to both Prudential Insurance Company of America and the City of Boston. Prudential held the senior facility. In connection with such loans, Prudential and the city entered into an intercreditor agreement whereby Boston expressly agreed to assign its voting rights in any borrower bankruptcy case.
In support of plan confirmation, the City of Boston voted in favor of the plan, as did every other voting creditor class except Prudential. Prudential objected that the plan failed to enforce the intercreditor agreement and subordination of the city's voting rights. Prudential argued that the city lacked standing to vote based upon the express assignment of its voting rights.
Prudential further argued that the city should not receive any payments until Prudential was paid in full. Moreover, according to Prudential, because the intercreditor agreement required the city to assign its voting rights in any bankruptcy case involving SW Boston, Prudential held the city's vote and cast it to reject the plan. As a result, Prudential sought to invalidate the City of Boston's acceptance of the plan, and obtain a ruling that the city's vote was to reject.
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Trending Stories
- 1The Law Firm Disrupted: For Big Law Names, Shorter is Sweeter
- 2Wine, Dine and Grind (Through the Weekend): Summer Associates Thirst For Experience in 'Real Matters'
- 3'That's Disappointing': Only 11% of MDL Appointments Went to Attorneys of Color in 2023
- 4What We Know About the Kentucky Judge Killed in His Chambers
- 5'I'm Staying Everything': Texas Bankruptcy Judge Halts Talc Trials Against J&J
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250