Lawyers for Senator Jim Justice and his family are asking a judge overseeing a case over control of The Greenbrier Hotel to allow until August 7 to work out complexities like a casino license review, but it’s not at all clear that West Virginia Lottery’s oversight will be completed by that date.
Members of the West Virginia Lottery Commission met by telephone today to discuss the agenda for the next regular meeting, July 29.
With the casino license review still ongoing, the matter has not made that July 29 agenda at this point.
The next regularly scheduled meeting of the lottery commission is August 26.
“We’re treating this just like we treat any transaction,” said acting Lottery Director David Bradley. “I understand the importance of this and I understand the urgency of this, and you know we want to we want to do it right. We’re going to follow the law, and we’re going to do what the what the law is expected.”
The casino license is under review because of a proposed $500 million financing transaction between the Justice family business network and the New York firm Kennedy Lewis Investment Management.
The Justices and their Greenbrier Hotel Corporation say the half-billion dollar deal could pay off big debts while also providing enough to invest in long-needed hotel improvements.
The financing possibility came out of a federal lawsuit by the Omni Hotels affiliate White Sulphur Springs Holdings, which bought about $300 million in first-lien debt on The Greenbrier earlier this year.
Lawyers for the holding company say their collateral is at risk, and they’ve been asking the judge to appoint a third-party receiver to oversee the hotel while pushing out the owners, Senator Jim Justice and his family business.
So the Justices have been trying to pull together the $500 million deal to pay down White Sulphur Springs Holdings and keep the hotel.
But a complication of that is the casino license review.
Lottery has to examine aspects of the evolving financial arrangement for potential effects on the casino license. Bradley called it a complex transaction.
“It’s very significant transaction, and we’re still working with the the Greenbrier and Kennedy Lewis on making sure that we get all the required documents that we’ve requested,” Bradley said.
“And I know there’s urgency obviously on the part of The Greenbrier, and until we have received all the documentation that we’re looking for and requiring — and until we have reviewed it and vetted it properly, and we have done our due diligence here — at such time that is done and completed, then we will bring that before the commission and put that on the commission agenda for your review and approval.”
Bradley added, “I’m sure as we go through the review, there’ll be documents and and questions that we have — and there’ll be things that we’re probably going to request more information of.”
Lawyers for the Justices this week asked a federal judge to halt activity on the federal case until at least August 7 to work through such issues.
In an update to the court this week, lawyers for the Justices described the timeline between The Greenbrier and the West Virginia Lottery Commission.
“Defendants are awaiting the approval of the WVLC as it relates to The Greenbrier’s casino license,” wrote lawyers for the Justices. “The primary transaction documents are under review by the WVLC. While defendants have diligently sought approval of the transaction, WVLC has not yet acted on this issue, though Defendants expect to receive approval soon.”
On Monday, Steve Ruby, a Charleston attorney who serves as outside counsel for The Greenbrier, addressed members of the Lottery Commission.
“I don’t want anybody to think that there’s been any lack of of diligence on our part. I think the stage where we’re at now is that we have submitted a considerable amount of documentation to the to the commission and the staff,” Ruby said.
“We appreciate, as always, their work on it, and the stage that we’re at now is addressing follow-up requests that have arisen as a result of the the documentation that we have submitted, and getting the final, final version of the the transaction documents done, which we expect will will be done by by this week.”
Lottery Commission leaders discussed when they might be able to act on the casino license review, but the main takeaway is that it won’t be finished until it is finished.
“Obviously it’s not going to be on the upcoming meeting agenda because of the lack of information it appears that you have at this point, nor the opportunity to review the documents to the degree they need to be,” said Lottery Commission Chairman Kenneth Greear, speaking to the acting director.
“In the event that there is a delivery of those documents and you have added those documents appropriately and feel comfortable to be able to present to the commission the results of your review, then, if it is previous to the August meeting, then we can look to hold a special meeting to be able to look at those documents and be able to hear what’s being said and make a decision at that point.”
Bradley generally agreed but said what’s important is conducting a thorough review rather than meeting a particular date.
“I don’t want to bring a product to you that that hasn’t been vetted properly or looked at and scrutinized with the attention that it deserves and that it needs. So that’s our expectations here, and you know we’re working on it. It’s not something that’s not being worked on. I mean, it’s absolutely a priority here,” Bradley said.
“I do concur with you, if it’s ready before the August meeting. But I just don’t want to — and I’ve communicated this to to them — I don’t want to be pressured to lock down a date and say we will have it by a certain date. I want to make sure that we keep that open and at the appropriate time when when we’re ready and it’s appropriate, I assure you that that we’ll put it on the agenda and get it done.”