Judge Scraps Jameson Inns Unit's Ch. 11 For Bad Faith

Law360, Wilmington (December 23, 2011, 4:29 PM EST) -- A Delaware bankruptcy judge tossed the bankruptcy case of a Jameson Inns Inc. mezzanine debt unit on Thursday, clearing the company’s private equity lender to foreclose and potentially wipe out junior lenders.

In a 33-page opinion, U.S. Bankruptcy Judge Mary F. Walrath dismissed JER/Jameson Mezz Borrower II LLC’s Chapter 11 case with prejudice, agreeing with lender Colony Capital LLC that the bankruptcy was undertaken in bad faith and served no valid bankruptcy purpose.

In her decision, Judge Walrath relied on the fact that the debtor is...
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