In re Southbridge Associates LLC: Wellsworth Hotel Owner Files Chapter 11 a Day Before Lender's Foreclosure Auction

Southbridge Associates LLC, which owns the 203-room Wellsworth Hotel and conference center complex at 14 Mechanic Street in Southbridge, Massachusetts, filed a Chapter 11 petition on October 6, 2026. The filing came one day before October 7 foreclosure auctions of the hotel site and the on-site power plant equipment that had been scheduled on behalf of lender X-Caliber Rural Capital, which made a $13.25 million loan on the property in 2022. A cash collateral motion was docketed on October 8, and an affiliate, Southbridge Associates II LLC, had already filed its own Chapter 11 case on September 21.

Why it matters

The case is a textbook eve-of-auction filing: the automatic stay generally freezes a mortgagee's sale the moment the petition is filed, shifting the fight from the auction block to the bankruptcy court's cash collateral and stay-relief hearings. Hotel lenders should note how quickly the cash collateral fight arrives, since room and event revenue is both the lender's collateral and the debtor's operating budget.

Case timeline · 5 entries Latest: October 8, 2026 — Cash collateral motion docketed; court sets hearings the next day

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Recently added

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