A flurry of activity followed Friday’s announced completion of a $500 million financial deal for The Greenbrier Hotel.
Lawsuits over control of the historic hotel were swiftly dismissed at both the county and federal levels. And a new deed of 53 pages was filed to reflect the financial agreement.
All of that happened after Senator Jim Justice and his family, owners of the historic resort for more than a decade, announced a big financial deal on Friday with the New York firm Kennedy Lewis Investment Management.
It is not just a loan, but is also a joint venture with tangible signs that the investment firm has a majority stake and a majority on the governing board, including the chairman.
“I truly believe The Greenbrier’s best days are still ahead, and Cathy and I could not be more excited about what comes next,” said Jim Justice, the senator and head of the family ownership group.
The deal swept away court conflict and immediate financial peril, but also ushers in an era of new debt and an untested joint venture.
As part of the broader settlement, a lawsuit in Greenbrier County over control of The Greenbrier Hotel has been dismissed.
In that state case, the owners of The Greenbrier claimed that longtime lender Carter Bank & Trust and the owners of White Sulphur Springs Holdings, Texas billionaires Robert and Blake Rowling, had colluded and improperly used insider information to gain control of Greenbrier Hotel debt.
The owners of The Greenbrier, Senator Jim Justice and his family, were saying the debt improperly changed hands from Carter Bank to White Sulphur Springs Holdings.
On Friday, lawyers in the case entered a joint motion to dismiss it: “The Parties have reached a full and final settlement and compromise resolving all claims, counterclaims, and controversies asserted or that could have been asserted between them in this action.”
Greenbrier Circuit Judge Robert Richardson agreed to the dismissal.
That coincided with dismissal of a federal lawsuit the same day.
In the federal case, Omni Hotels affiliate White Sulphur Springs Holdings had asked for a third-party caretaker to oversee The Greenbrier. The holding company, which purchased $300 million in first-lien debt on The Greenbrier, had contended its collateral was at risk.
All the court activity came to a halt on Friday after The Greenbrier owners announced the completion of a new, $500 million joint venture with the New York financial firm Kennedy Lewis Investment Management.
The Justices maintained that the half-billion dollar financial deal with Kennedy Lewis would be enough to pay down the debt to White Sulphur Springs Holdings and other creditors like state and federal tax authorities with enough left over to invest in hotel upkeep.
Coinciding with the financial deal and the dismissal of the court conflicts, a new deed was filed in Greenbrier County reflecting a transaction of $515,781,250.
The iconic, 710-room Greenbrier in White Sulphur Springs features a private casino, four golf courses and a spa. Justice and his family bought the historic resort out of bankruptcy in 2009. It’s been at the center of Justice’s public persona.
Greenbrier representatives say the transaction provides the hotel with a robust financial foundation and underpins long-term investment in the resort, its facilities and the guest experience.
The Greenbrier will remain open and fully operational throughout the transition. Existing reservations, meetings, conferences, weddings and other scheduled events will continue as planned.
The Greenbrier’s announcement specified that “casino operations will continue without interruption.”
The West Virginia Lottery Commission has not yet signed off on a review of The Greenbrier’s casino license as it’s affected by the financial deal.
The Lottery Commission has a telephone conference planned for this Wednesday to shape the agenda for its next meeting, which is a week later, August 26.
Until then, a letter from Lottery to lawyers for The Greenbrier strongly suggested that the casino could continue to operate on an interim basis if a plan is in place to wall off the new leadership structure’s authority until the Lottery Commission meets.
Lottery has noted that three members of a five-member board to oversee The Greenbrier are new since the deal with Kennedy Lewis.
“You will be in compliance with the law so long as the unapproved board members of the holding company exert no authority over the operations of the casino. And, as a result, the casino can continue to operate prior to the final vote of the Commission,” wrote acting Lottery Commissioner David Bradley.
He continued, “I do not believe that closing the casino is necessary if you take the proper steps to insulate the new board members from the casino operations until they are approved.”
In a series of letters outlining the review, West Virginia Lottery indicated “the Kennedy Lewis Partnership will acquire 51 percent control of the Greenbrier, a significant change in ownership and control.”
That same letter made reference to a five-member board with James C. Justice III, usually known as Jay, occupying one of the seats. A response letter from Steve Ruby, a lawyer working for the Justices, makes reference to a second Justice manager position left vacant at closing.
Friday’s announcement of the financial transaction specified that Kennedy Lewis has appointed Lloyd Nathan as chairman of The Greenbrier’s board of directors.
Nathan was described as bringing decades of experience across hospitality, gaming, real estate, investment and large-scale development, including nearly a decade with MGM Resorts International.
“The Greenbrier is one of the truly irreplaceable destination resorts in the United States,” Nathan said in the announcement.
“Very few properties can match its history, natural beauty, scale, amenities and emotional connection with generations of guests. Our intent is not to change what makes The Greenbrier special but to invest in its future, enhance what makes it exceptional and ensure America’s Resort continues to thrive for generations to come.”