Sen. Justice鈥檚 attorneys respond in state case over Greenbrier鈥檚 future

CHARLESTON – Attorneys for U.S. Sen. Jim Justice and his family continue to argue that a Texas-based hotel chain and Virginia bank colluded to transfer the family’s loan debt on the historic Greenbrier Resort in order to take it away.

Attorneys for the Justice family filed a consolidated reply on June 5 in response to previous filings by attorneys for TRT Holdings and Carter Bank and Trust in a case filed by the Justices in Greenbrier County Circuit Court seeking a preliminary injunction against the two companies.

The state case was filed in April by the Justice family following a federal lawsuit filed by White Sulphur Springs Holdings LLC (WSSH), created by TRT Holdings following its purchase of Carter Bank’s Greenbrier loan debt at the end of March. The Justice family alleges that Carter Bank and TRT Holdings engaged in a deceptive conspiracy to orchestrate a hostile takeover of the Greenbrier by unlawfully selling and acquiring the hotel’s debt. TRT Holdings has denied these claims.

Justice’s attorneys argue that TRT Holdings and Carter Bank unlawfully orchestrated a loan sale using misappropriated confidential information and broken contracts to attempt a hostile takeover of the Greenbrier. According to the filing, the injunction is necessary to stop irreparable harm to the resort’s reputation and operations while the court determines the legality of the loan acquisition.

“Plaintiffs’ preliminary injunction motion seeks straightforward relief: a temporary injunction against Defendants’ harmful and destabilizing loan-enforcement efforts until this Court decides who actually owns those loans,” wrote Steven Ruby and H. Rodgin Cohen. “Defendants’ opposition briefs are works of distraction, advancing a counterfactual narrative and mischaracterizing Plaintiffs’ requested relief.”

“Conspicuously absent from those briefs, however, is any serious dispute that Defendants’ actions are inflicting serious irreparable harm on Plaintiffs and The Greenbrier,” the attorneys continued. “That ongoing harm, coupled with the lack of any comparable prejudice to Defendants and Plaintiffs’ strong showing on the merits, warrants injunctive relief.”

In earlier filings, attorneys for TRT Holdings argue that the court lacks the authority and jurisdiction to halt their collection efforts, especially since a separate federal action is already underway to appoint a receiver for the property. Attorneys for Carter Bank argue that previous loan agreements signed by the Justice family include requirements that certain lawsuits be filed in New York; Martinsville, Va.; or the U.S. District Court for the Western District of Virginia.

TRT Holdings, which owns more than 50 hotels including a luxury resort 40 miles away from the Greenbrier in Virginia, bought the remaining Greenbrier loan debt – now more than $370 million according to the 14th amended and restated forbearance agreement – in March.

A deal between the Justice family and TRT Holdings’ subsidiary, WSSH, that would have seen TRT Holdings take a 50% stake in the Greenbrier failed at the beginning in April according to court documents. According to TRT Holdings, the Justice family is now in default after failing to make their April interest payment and pay outstanding real estate taxes, with the April 15 maturity date now expired.

Attorneys for the Justice family argue that The Greenbrier is facing immediate and irreparable harm due to the defendants’ ongoing efforts to enforce loan remedies, which they claim are destabilizing the resort’s operations and reputation.

According to Friday’s filing, customers and vendors are questioning the stability of The Greenbrier following public declarations of default and the threat of additional creditor remedies, with group-sales activities slowing and prospective business being lost as a direct response to the TRT Holdings/WSSH’s federal lawsuit.

“In the hospitality industry, reputation, vendor confidence, and repeat business are essential assets whose loss equates to irreparable harm,” Ruby and Cohen wrote.

“Regardless of what reputation The Greenbrier previously had (or why), Plaintiffs’ undisputed evidence directly links recent customer and vendor concerns about The Greenbrier to Defendants’ conduct – false assertions that The Greenbrier is in disrepair, freezing accounts, public declarations of default, and the threat of additional creditor remedies,” the attorneys continued. “That conduct is causing irreparable harm, and Defendants do not explain how that harm could be remedied by damages, presumably because they cannot.”

The federal lawsuit filed by TRT Holdings/WSSH is on hold, with U.S. District Judge Frank W. Volk granting a request by attorneys for the Justices, relieving parties in the federal lawsuit from previous deadlines while the family works to close on a deal with a new loan provider to pay off the WSSH debt.

According to a redacted term sheet provided by the Justice family, New York-based Kennedy Lewis Investment Management could provide the Justice family up to $500 million to refinance existing debt and fund capital improvements at The Greenbrier, secured by the Greenbrier Resort and connected properties as well as land and timber assets owned by the Justice family. The proposed deal also involves loan guarantees secured by U.S. Sen. Justice and other members of the Justice family.

Attorneys for WSSH are asking Volk to appoint a receiver for the Greenbrier and miscellaneous properties and issue a permanent injunction against the Justice family to prevent further interference in the resort’s operations. While attorneys for WSSH have stated they are willing to drop the lawsuit when and if the Justice family is able to satisfy the loan debt, attorneys for the Justice family doubt this.

“Defendants have no interest in collecting on the Loans; they want to take possession of The Greenbrier,” Ruby and Cohen wrote. “The public’s interest in preserving stability at The Greenbrier … far outweighs those generalized concerns [of debt enforcement].”

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