Sponsor Bails On Barnes Bay Reorganization

Law360, Wilmington (September 29, 2011, 5:23 PM EDT) -- Starwood Capital Group, the secured lender that sponsored Barnes Bay Development Ltd.'s recently rejected Chapter 11 plan, asked a Delaware bankruptcy court on Thursday to toss the case, saying it would no longer fund the deadlocked process.

The lender recently acquired Barnes Bay’s luxury resort on the island of Anguilla with a $165 million credit bid and funded its reorganization plan, but disgruntled creditors seeking the return of deposits on residences at the resort derailed the plan at the altar.

On Sept. 20, U.S. Bankruptcy Judge...
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