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Court filings lay out Greenbrier financing drama, but Justice says historic hotel is solid

In public comments that came right after a federal court filing described major complications with refinancing loans for Greenbrier properties, Gov. Jim Justice characterized the finances for the historic hotel his family owns as stable.

The governor’s assessment grouped in Bluestone Resources, the umbrella company for his family’s coal holdings, which also have been the subject of recent high-profile turmoil.

“From the standpoint of the health of The Greenbrier, from the standpoint of the health of Bluestone, both are extremely, extremely healthy,” Justice said today. “And they’re doing well.”

Justice’s companies filed federal suit this week against Carter Banks & Trust of Virginia, alleging the once-loose financial relationship had become more restricted and tense in recent years, culminating with a standoff over refinancing Greenbrier properties during the past couple of months.

The Greenbrier holds a special place in West Virginia’s history, laying claim as “America’s Resort” that has been visited by presidents but also enjoyed by the general public.

To much acclaim, Justice’s family purchased the iconic Greenbrier out of bankruptcy in 2009. “I knew I just couldn’t mess this up,” Justice told The Washington Post in a story that ran two years after the purchase. “I mean, the employees know where I live.”

But the lawsuit filed by Justice and his companies this week in U.S. District Court for the Southern District of West Virginia at least cast doubt on the current situation.

The lawsuit describes tension with Carter Banks coming to a head over the past eight weeks over the Justice family’s desire to partner with another lender to refinance loans that Carter held. The Justice companies alleged being stonewalled.

“Although the Justice Entities have advised Carter Bank that such replacement financing is available and in the final stages of negotiation, Carter Bank has refused to engage in any discussions,” the lawsuit stated.

The suit makes specific reference to loan payments due June 1 for “Greenbrier Entities,” defined as The Greenbrier Hotel, Greenbrier Golf & Tennis Club, Greenbrier Medical Institute, Greenbrier Sporting Club, Justice Family Group, Oakhurst Club and The Greenbrier Sporting Club Development Company.

More broadly, that includes golf and tennis facilities, a spa, dining, a casino and a medical clinic and spa.

The five-year maturity loans for the Greenbrier properties came due June 1, according to the lawsuit. The Justice companies described repeated communication attempts to not only pay what was due June 1, but also to pay off all outstanding loan balances with Carter Banks.

“Most egregiously, Defendants refused any discussion with Plaintiffs even in the immediate lead-up to the June 1, 2021, repayment date during which time the Greenbrier Entities informed Carter Bank that they were in the final stages of securing the replacement financing from a new lender for the repayment of all their Carter Bank loans, putting that replacement financing in jeopardy.”

Justice briefly described the situation after being asked about it during a regular briefing today.

“What we were trying to do was pay Carter Bank off, pay Carter Bank off for a large, large, large percentage of the loans we had with Carter Bank,” Justice said.

Asked whether the alternative lender was Greensill, the bankrupt international financial services company that the Justices are also suing, the governor laughed.

“From the standpoint of the other lender, it was not Greensill,” he said. “Good gosh. I’m telling you. Greensill — are you kidding me? With what Greensill has done to my companies that are being run by my kids. Are you kidding me that we would be looking at doing a loan with Greensill?”

But Justice did not specify whether the debt was refinanced this week with another lender or what company that lender is.

Two years ago, Justice’s companies sued insurers at The Greenbrier, claiming they were resisting an array of claims from the 2016 flood that ravaged the property. That lawsuit contended bad faith by the insurers meant The Greenbrier had been “brought to near financial insolvency.”

This has been a major week of news about the governor’s sprawling business holdings. The Wall Street Journal reported that Justice personally guaranteed $700 million in loans from Greensill, which collapsed this spring. The governor then confirmed that at a briefing this week.

The Journal reported that Greensill packaged such loans and sold them to investment funds managed by the financial services company Credit Suisse, which is now pressing to recover lost investments. Justice’s Bluestone Resources, which Credit Suisse has named as one of three major borrowers from the Greensill funds, is suing Greensill.

Then the Justice companies filed their lawsuit against their original lender, Carter Banks. That lawsuit attempts to hold Carter Bank liable for $421 million in damages to the Justice companies. And it indicates the Justice companies have $368 million of outstanding loans with Carter Bank.

Justice began his comments today by saying West Virginia citizens have been aware of his high-stakes business dealings — and that has been a major factor in his political appeal. “First of all, my family does big business and they’ve done that forever, and the knowledge that I have had from being able to do that, I’ve brought to the governor’s office.

“And to be perfectly honest, that’s a lot of the reason that I’ve been able to be as successful in doing things — because I had a lot of knowledge. I had a lot of experience. The voters, they knew that. Unfortunately from time to time, you get into disputes and you either sue somebody or somebody sues you.”

But he concluded by advising not to fret about the recent business drama.

“We’ll get through it,” Justice said. “We’re in good shape from the standpoint of our companies. Everybody needs to quit worrying about that.”

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