A federal judge has ordered lawyers for Senator Jim Justice and his family business organization to submit a redacted term sheet by Wednesday to better assess the financing that’s been characterized as enough to fully satisfy the loans at the center of a conflict over control of The Greenbrier Hotel.
For any parts of the term sheet the Justice family still contends should remain under seal or be reviewed only privately by the judge, their lawyers must explain by filing a supplemental memorandum of law the same day.
This has all moved swiftly after lawyers for the Justice family on Friday publicly announced that they have an agreement on financing that’s enough to pay off outstanding loan debt while also providing funding to resolve other outstanding obligations like tax liens. They said the amount would also allow for hotel upgrades.
The lawyers for the Justices have not named a specific lender or provided a financial figure, although they said in a recent court filing that “the financing is for up to $500 million and would represent less than 5% of the total assets under management of Defendants’ financing partner.”
Lawyers for the Justices on Friday also entered a filing to ask for deadlines and hearings in an ongoing federal court case to be delayed 60 days because the financing arrangement had emerged, although they said “specific terms of the financing are commercially sensitive and subject to a nondisclosure requirement.”
U.S. District Judge Frank Volk judge did not immediately grant the 60-day continuance, but instead chose to order the redacted term sheet to better weigh true business competition concerns against interests in public access.
“In conclusion, some further effort toward disclosure is necessary. The Court recognizes that Defendants have agreed with the financing partner to keep the term sheet confidential,” Volk wrote.
“At the same time, Defendants urge the Court to use that undisclosed document — ex parte and in camera no less — to halt these pivotal proceedings. That approach necessarily warrants careful scrutiny in light of the foundational, adjudicative interests in public access, party participation, and adversarial testing.”
The historic resort is owned by Senator Jim Justice and his family, who purchased The Greenbrier out of bankruptcy in May 2009. Since then, it has remained a central asset of the Justice family business empire even as financial troubles have swirled.
Their lender was Carter Bank & Trust of Martinsville, Va., which went through periods of conflict with the Justices as the original debt ballooned.
This past March, newly formed White Sulphur Springs Holdings LLC bought nearly $300 million in first-lien debt on The Greenbrier and related properties from Carter Bank. The holding company does not own the hotel but does own the debt.
White Sulphur Springs Holdings is an affiliate of Texas-based TRT Holdings, which is owned by Texas billionaire Robert Rowling, whose son Blake serves as the company’s president. Their Omni hotel company operates more than 50 luxury properties, including The Homestead, which is less than an hour from The Greenbrier.
Days after the debt purchase, White Sulphur Springs Holdings asked for receivership for the hotel, contending the Justices have been diverting profits to other interests while building up deferred maintenance, putting the collateral at risk.
The holding company also asked a federal judge for a temporary injunction order that would push the Justices out of hotel control.
Judge Volk, in his latest order, characterized the Justices and White Sulphur Springs Holdings as having a “now-seemingly bitter adversarial relationship” and described the current state of affairs as a “poisoned well.”
Lawyers for White Sulphur Springs Holdings wrote in their own court filing that they learned of the proposed financing for the first time on Friday.
“Moreover,” wrote the lawyers for White Sulphur Springs Holdings, “Defendants failed to provide WSSH with any meaningful information regarding the terms of the ‘expected’ financing to allow WSSH to make an informed decision concerning their motion to continue.”