A federal judge has agreed that the possibility of a half-billion dollar financing proposal for The Greenbrier Hotel should get enough time to determine whether it will blossom or fade.
U.S. District Judge Frank Volk has granted a delay in federal lawsuit proceedings over control of the historic West Virginia resort, saying “comparative prejudice weighs in favor of granting the brief delay sought.”
His order bumps back deadlines and hearings in the case by a couple of months. That could allow for enough time for due diligence on the financing, which lawyers for the Greenbrier’s owners have said would probably close in June.
“In the face of essentially divesting the Defendants of their highly prized, historic, and long-held assets, a final attempt to avoid that strong medicine tips the balance in favor of allowing them a brief period to consummate the subject transaction,” Volk wrote.
The Greenbrier is owned by Senator Jim Justice and his family, who bought the resort out of bankruptcy in 2009.
The Justices are in a battle with a company called White Sulphur Springs Holdings, which bought $300 million in rights to loans on The Greenbrier and related assets earlier this year.
White Sulphur Springs Holdings is a subsidiary of TRT Holdings, parent company of the national Omni Hotel chain. After buying the debt, White Sulphur Springs Holdings filed a federal lawsuit to name a receiver at The Greenbrier and force the Justices out.
This month, the Justices announced the possibility of a financing deal with another company, Kennedy Lewis Investment Management, a New York-based alternative asset management firm.
Lawyers for the Justices submitted a redacted term sheet into the federal court case showing that the amount is up to $500 million.
The loan is to be secured on a first-lien basis by a pledge of 100% equity in the borrower and all Greenbrier assets. Collateral also includes development projects, land and timber farms.
It also includes personal guarantees by some of the parties, although specific names are redacted in the exhibit. Jim Justice and several of his family members have signed personal guarantees in past financial arrangements.
The Justices have said the financing will satisfy all obligations that have been at the core of the conflict while also positioning the historic resort for significant long-term growth and investment.
“This financing represents a major vote of confidence in The Greenbrier, its future, and its enduring place as one of the most iconic resorts in America,” said Dr. Jill Justice, president of The Greenbrier, in an announcement of the proposed financial deal.
“It secures the resources necessary not only to satisfy the obligations at issue in this litigation, but also to make substantial long-term investments that will strengthen and preserve The Greenbrier for generations to come.”
The lawyers for White Sulphur Springs Holdings opposed the delay, characterizing the financing proposal as shaky.
“In short, Defendants have identified a partner who has agreed to conduct due diligence and who has made clear it can walk away at any time, for any reason, without consequence,” wrote the attorneys for White Sulphur Springs Holdings in a filing late last week.
“This is a far cry from Defendants securing financing to satisfy their indebtedness to WSSH in full.”
Judge Volk, in an order entered this weekend, concluded that the ask of pulling control of The Greenbrier from the Justices is weighty enough that it’s worth seeing whether the financing comes together.
Volk wrote that “receivership is an exceptionally serious matter. It is the corporate equivalent of martial law, wherein a court-appointed outsider takes command of the company’s economic lifeblood under judicial authority. This is why the potential for prejudice to the receivership opponent is often of the cataclysmic variety.”
The judge ordered the parties to the case to file status reports on June 14 and July 3 about the progress made toward the closing of the financing arrangement “with the expectation that closing will occur on or before July 16, 2026.”
Volk indicated that if there’s a push to delay beyond that, the court’s patience could grow thin.
“If Defendants seek further extensions for either (1) more extended negotiations with, or financing due diligence by, the financing partner, or (2) to allow additional forays with other lenders, the balance of prejudice will likely shift rather abruptly,” Volk wrote.