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Appeals court backs reorganization plan in W Hotel and Residences bankruptcy

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The developer of Boston’s W Hotel and Residences has won a legal victory upholding its reorganization plan.

The ruling, by the US First Circuit Court of Appeals, allows the developer, SW Boston, and its affiliates to proceed with a plan for repaying debts to creditors that provided funding for the hotel-condominium project.

SW Boston filed for bankruptcy protection in 2010 after slow condo sales at the Theatre District complex left it without enough money to repay its lenders, including the City of Boston and Prudential Insurance Co. of America.

Prudential had objected to SW Boston’s reorganization plan and sought to foreclose on the remaining condominiums the developer owns at the complex. SW Boston sold the hotel for $89.5 million in June 2011 but still owns unsold condos in the 123-unit complex.

The company said 95 percent of the condos have been sold or are under agreement and that the ruling will allow it to fully reimburse all creditors.

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