Will W Union Square hotel be blocked from ownership transfer?

The special servicer of the W New York-Union Square’s $115 million mortgage wants a bankruptcy judge to block a plan that would transfer ownership of the hotel to Host Hotels & Resorts, a publicly traded real estate investment trust. In court papers filed Monday, LNR said the mortgage debt holders it represents haven’t agreed to the plan because it would “clearly negatively impact the senior mortgage loan and run afoul of the senior mortgage loan documents,” the Wall Street Journal reported. The mortgage holder is concerned about liability releases granted under the plan and a proposed lease change. The plan also settles pending litigation involving the companies and their secured creditors. The U.S. Bankruptcy Court in Wilmington, Del., will consider confirming the plan at a hearing Friday. [WSJ]