NEW YORK CITY-A federal bankruptcy judge has confirmed the plan first announced last month to transfer ownership of the W New York—Union Square to a group led by Host Hotels & Resorts LP. LNR Partners Inc., the special servicer on the high-end hotel’s $115-million mortgage, had filed papers last week in US Bankruptcy Court in Delaware objecting to the transfer on grounds that the mortgage debt holders hadn’t given their consent.

In an order dated this past Friday, Judge Kevin Carey ruled that the plan filed by Hotels Union Square Mezz 1 LLC and Hotels Union Square Mezz 2 LLC was in accordance with the US Bankruptcy Code and could proceed. The plan calls for some of the proceeds from the transfer to be used to satisfy the $61-million claim of senior mezzanine lender DekaBank Deutsche Girozentrale, but otherwise leaves the mortgage holders out in the cold. A spokeswoman for LNR tells GlobeSt.com the company has no comment.

A new Host-led venture will buy the 285-key hotel at 201 Park Ave. South under the plan approved by Carey, with DekaBank being repaid and LEM Mezzanine receiving current and future payments on its original mezz loan. An affiliate of LEM had bought the W this past fall in a foreclosure auction for $2 million and the assumption of $212 million in debt. Hotels Union Square Mezz 1 and Mezz 2 filed for Chapter 11 protection this past March.

Istithmar World Capital, the Dubai World unit that bought the 20-story property in 2006 for $285 million but later defaulted on loans, will be a minority member of the Host-led venture. Meanwhile, W Hotel Management, an affiliate of Starwood Hotels & Resorts Worldwide, will continue to manage the hotel under its existing management agreement.