Greenbrier lawyers: Omni misleading judge about Greenbrier

BECKLEY – In the latest court filing, attorneys for Sen. Jim Justice’s family again say they have locked in financing to pay off nearly $300 million in debt for The Greenbrier while accusing an affiliate of Omni hotels of misleading a federal judge in a bid to seize control of the historic resort.

In a reply filed late July 16, Justice’s attorneys dispute White Sulphur Springs Holdings’s latest filing about a pending refinancing transaction. WSSH, an affiliate of Omni Hotels & Resorts’ parent company TRT Holdings, holds roughly $300 million in first‑lien debt tied to The Greenbrier and has asked for a federal receiver to take over the resort.

U.S. District Judge Frank W. Volk previously extended a deadline for a planned refinancing after Justice’s side said a roughly $500 million deal was in the works that could pay WSSH and other creditors while recapitalizing the resort.

In the new filing, attorney Steve Ruby says the Justice entities “have secured financing to pay (WSSH’s) demand in full,” referring to an approximately $387 million payoff quote sent July 8 by WSSH’s counsel.

In an attached email, Ruby writes that the Justices obtained financing despite disputing “various aspects of the basis for that demand” but also were interested in exploring a “global resolution” that would settle all claims among the parties.

WSSH’s July 8 payoff demand reflects nearly $100 million more than what TRT Holdings paid a few months earlier to buy the Greenbrier‑related loans from Virginia‑based Carter Bank & Trust, according to earlier filings and public disclosures. The Justice reply characterizes that spread as an effective annual return of about 115 percent on WSSH’s cost basis if the payoff were made on WSSH’s timetable.

The centerpiece of the Justice reply is a claim that WSSH misled the court by suggesting Justice’s side has conditioned the refinancing closing on settlement talks. In its earlier response, the Omni affiliate asserted that defendants were tying the new financing to “unspecified negotiations” over broader legal claims, implying the payoff might not occur without a global deal.

Ruby says the record shows the opposite in that the defendants told WSSH they had financing in hand to meet the full payoff demand but were willing to accept a lower amount in exchange for a comprehensive settlement.

“Plaintiff’s claim that defendants have conditioned their refinancing on settlement discussions is incorrect,” the reply states, arguing that WSSH’s filing omitted key details about the July email exchanges.

On July 3, Ruby asked WSSH counsel Clay Hoblit of Texas‑based Hoblit Darling Ralls Hernandez & Hudlow for a payoff statement and whether WSSH was interested in discussions that would resolve “all the parties’ legal claims,” including the Justice‑filed action in Greenbrier Circuit Court. In that state‑court case, Greenbrier‑related entities accuse Omni’s parent and Carter Bank of orchestrating a “hostile takeover” by buying the debt and declaring a sham default.

Hoblit’s July 8 response provided the $387 million payoff as of July 16 and proposed that any global resolution would require full payment of all judgment obligations, interest and expenses, satisfaction of indemnity and expense obligations under a 14th Forbearance Agreement, dismissal with prejudice of the state‑court case, a broad release of claims against WSSH and its affiliates, and a comprehensive settlement agreement with releases, indemnities and confidentiality provisions.

Ruby’s July 14 reply email proposed paying $320 million upon closing – an amount he said would represent a 33 percent annualized return on WSSH’s cost basis – plus WSSH’s claimed collection costs, while dismissing the Greenbrier County suit and providing releases to WSSH and its affiliates.

The reply places those settlement talks within a broader narrative that Justice’s lawyers have pressed since Omni’s affiliate entered the case. Earlier state‑court filings by the Greenbrier Hotel Corporation and Justice‑controlled entities allege TRT Holdings and Carter Bank used confidential information and violated agreements to buy the resort’s debt at a discount and then move toward a takeover.

WSSH has told both federal and state courts the Justice family defaulted on more than $141 million in remaining debt, misused revenue and allowed the resort’s physical and financial condition to deteriorate, leaving unpaid tax bills and unpaid employee‑related obligations. The Omni affiliate has asked Volk to appoint a receiver over The Greenbrier and related entities, arguing Justice’s financial problems and alleged mismanagement threaten the value of the collateral and the local economy.

WSSH’s most recent status filing raised concerns The Greenbrier was underinsured and insurance coverage had been canceled as the refinancing continued.

In Thursday’s reply, Justice’s side says that after WSSH acquired the loans, the Omni affiliate “unilaterally took out insurance coverage on defendants’ assets and named itself as beneficiary,” and that the carrier canceled that coverage once it learned WSSH’s claim to the loans is disputed and subject to active litigation.

The latest filing says “The Greenbrier’s legitimate insurance coverage has not decreased” and that the resort “is not underinsured,” pushing back on suggestions that the property is exposed to new risk. The defendants also say tax liabilities cited in WSSH’s filing “will be fully satisfied when the refinancing transaction closes,” a point likely to be closely watched by local governments and suppliers who have pressed for payment.

Thursday’s reply also repeatedly accuses WSSH of downplaying or omitting communications that show the refinancing is progressing and that WSSH has been kept in the loop.

“Had plaintiff provided the court a complete description of the interaction between plaintiff and defendants regarding the refinancing transaction, it would have been evident that the transaction is on track and moving forward appropriately,” the filing states.

Justice’s lawyers also claim WSSH “has no genuine interest in being repaid; its goal, rather, is to take The Greenbrier,” echoing earlier claims that the receivership motion is a tactic to wrest ownership of the nearly 700‑room resort. They describe WSSH’s latest response as “a last‑ditch effort to derail” the refinancing and urge Volk to allow the transaction to close without further interference.

The fight over The Greenbrier comes as Justice’s businesses have been under strain from a series of judgments, tax liens and other financial obligations tied to coal, agriculture and hospitality holdings. WSSH’s recent filing highlighted what it called Justice’s “deteriorating financial conditions,” pointing to unpaid obligations and prior findings that his companies have been slow to pay their bills.