NEW YORK (Reuters) - Host Hotels & Resorts Inc
is set to take control of the W New York-Union Square,
capping a testy battle among the hotel's lenders and giving
Host a fifth hotel in the fast-recovering New York market.
U.S. Bankruptcy Judge Kevin Carey approved last week a
Chapter 11 plan of liquidation that allows Host, an owner of
more than 100 luxury and upscale hotels, to buy the W.
The deal to buy the W hotel was first announced by the
hotel's current owner LEM Mezzanine in July.
LEM, a junior lender, took control of the hotel from
Istithmar World, an arm of Dubai World, in December
for $2 million in a foreclosure sale.
In January, senior lender DekaBank Deutsche Girozentrale
sought to foreclose on its loan and possibly wrest
control of the hotel. But in March, the hotel's owner, Hotels
Union Square Mezz 1, filed Chapter 11 and halted the
The property was hit hard in last year's downturn as
companies curtailed travel budgets and the New York City hotel
market took a tumble.
Since then, New York hotels have rebounded. Room rates in
New York rose 13.1 percent in the week ended Aug. 21, besting
the 1.5 percent jump in rate seen in hotels nationwide,
according to Smith Travel Research.
Under the approved plan, Host can take control of the W New
York-Union Square. The sale proceeds be used to pay DekaBank's
$61 million claim in cash.
Istithmar, which is owned $37 million, will receive the
right to buy a stake in the Host-led venture buying the
property, called Venture LLC.
The hotel -- which features Rande Gerber's Underbar -- is
managed by Starwood Hotels & Resorts Worldwide Inc.
The case is In re: Hotels Union Square Mezz 1 LLC, U.S.
Bankruptcy Court, District of Delaware, No. 10-10971.
(Reporting by Deepa Seetharaman; editing by Andre Grenon)