Owners of the Omni Hotels & Resorts chain want to know what gives with a possible $500 million refinancing deal for The Greenbrier Hotel and associated properties.
Lawyers for the Omni affiliate White Sulphur Springs Holdings entered a legal filing on Wednesday afternoon into U.S. District Court for the Southern District of West Virginia asking what’s up. The company also took note of a series of financial blows that have recently struck the owners of The Greenbrier.
White Sulphur Springs Holdings, which owns about $300 million in first-lien debt on The Greenbrier Hotel, is in a battle for control of the historic West Virginia resort against the owners, Senator Jim Justice and his family.
Given everything swirling, the lawyers for White Sulphur Springs Holdings say their investment is at risk and “it appears likely that WSSH’s senior secured position and its collateral have been and continue to be materially prejudiced, and it is unlikely that it will be repaid in full and this action mooted as previously represented by Defendants.”
Aspects of the battle, including a half-billion dollar loan possibility, are coming to a climax this week.
Representatives of The Greenbrier Hotel asked a federal judge for a delay in court proceedings for time to pin down the big refinancing deal. Lawyers for the Justices said the financing deal could pay off White Sulphur Springs Holdings and other entities owed money while also providing enough to invest in long-needed hotel improvements.
The request for more time filed on May 22 was for 60 days.
U.S. District Judge Frank Volk then granted the delay “with the expectation that closing will occur on or before July 16, 2026.”
That is this Thursday.
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.
This past Friday, lawyers for The Greenbrier filed a status report saying they’ve been working on a review by the state Lottery Commission about how the resort’s casino license would be affected by a major financial deal.
Referring to West Virginia Lottery Commission, lawyers for the Justices wrote in the status report filed in a federal case, “Other preconditions to closing include the completion of the WVLC’s review process and any discussions that may occur between the parties to this case regarding resolution of their respective legal claims.”
Lawyers for the Justices said in the Friday filing that more time could be necessary to finish the big financial deal with Kennedy Lewis Investment Management.
“Due to the complexity of the transaction, a brief additional period may be required to close, but Defendants and KLIM continue to affirm their commitment to close the transaction expeditiously. Defendants will continue to update the Court as appropriate or as requested by the Court,” wrote lawyers for The Greenbrier.
Lawyers for White Sulphur Springs Holdings have now filed a response.
In particular, the lawyers for White Sulphur Springs Holdings got ahold of a July 10 letter from the acting West Virginia Lottery director to counsel for Greenbrier Hotel Corporation about the review of how the refinancing might affect the hotel’s casino license, indicating:
i. The submission of information regarding the refinancing transaction is incomplete and noted that additional items necessary for the review process include a completed acquisition application, purchase agreement, operating agreement, financial information, and key personnel information;
ii. Based on the current status of the license renewal request, it is unlikely that the matter will be presented to the WVLC until the regularly scheduled meeting in August at the earliest;
iii. It would be difficult to conclude that GHC possesses “financial integrity” or “adequate capital” if the proposed transaction does not address all outstanding debt. If the agreement allows GHC to take on new debt without eliminating all existing debt, it will only compound the problem instead of resolving it; and
iv. It would be contrary to the financial watch and difficult for the Acting Director of the WVLC to stand by any agreement that does not account for all outstanding liabilities.
The filing by White Sulphur Springs Holdings also outlines a series of severe financial and legal challenges facing the Justice family and their associated business entities, including the Greenbrier Hotel Corporation.
It outlines millions of dollars in unpaid federal taxes, a “financial watch” designation by the West Virginia Lottery Commission and a big increase in corporate liabilities.
Citing a recent order in a separate federal case in Kentucky, the filing emphasizes that the Justice family’s business practices have led to fraudulent transfer allegations and judicial findings that their companies operate as alter egos of the family members.
The lawyers for White Sulphur Springs Holdings question whether the Greenbrier owners have actually secured the promised refinancing and if they are attempting to avoid satisfying final court judgments through delays and shifting legal strategies.
White Sulphur Springs Holdings expresses continued concern that its investment in The Greenbrier properties debt is being compromised by the Justice family’s deteriorating fiscal health and unauthorized insurance cancellations.
The White Sulphur Springs Holdings lawyers note, “Defendants’ new lender, Kennedy Lewis, has not contacted WSSH concerning the payoff amount, escrow agreement form, release of lien forms or closing checklist.”
Furthermore, “GHC unilaterally cancelled $100 million of insurance that WSSH placed on the property to protect its collateral, leaving The Greenbrier substantially underinsured.”