Jim Justice outside The Greenbrier
BECKLEY – The company seeking ownership of The Greenbrier say new IRS liens, a “financial watch” by state regulators and fresh fraud litigation show U.S. Senator Jim Justice and his family are sliding deeper into financial distress and backing away from promises that a $500 million refinancing would quickly erase a judgment debt.
White Sulphur Springs Holdings, an affiliate of Omni Hotel & Resorts, filed a response July 15 in federal court to a status report filed last week by the Justice family and some of their companies.
In May, U.S. District Judge Frank Volk granted a short pause in The Greenbrier legal saga to see if a $500 million financing proposal for the Justice family comes to fruition. In the six-page filing, Volk says “comparative prejudice weighs in favor of granting the brief delay sought.”
Justice and his family businesses had requested the pause in case deadlines to allow them an opportunity to close new financing that could fully repay the loans and render the case moot. Volk did warn that no further extensions are likely if the financing deal does not close promptly.
In Wednesday’s filing, White Sulphur Springs Holdings said “material and relevant financial developments” since late May make it “unlikely” the company will be repaid in full on its judgments and that this action will be mooted as the defendants previously represented.
WSSH points to new federal tax liens, deteriorating balance‑sheet figures disclosed to state gaming regulators, related‑case findings from a federal court in Kentucky and an insurance cancellation that it says leaves The Greenbrier “substantially underinsured.”
The holding company notes the Internal Revenue Service recently filed a lien of $3,334,736.24 for 2024 and 2025 employment taxes under sections 940 and 941 against Greenbrier Hotel Corporation, the entity that holds the historic hotel and casino license. A separate lien of $289,893.94 for the same tax years and tax types was filed against Greenbrier Clinic, an affiliate of the defendants.
The filing also highlights actions by the West Virginia Lottery Commission, which oversees casino licensing at The Greenbrier. WSSH says the Lottery has placed Greenbrier Hotel Corporation on “financial watch” based on an audit performed in connection with the renewal of its casino gaming license. In the court filing, WSSH says the Lottery placed The Greenbrier on the “financial watch” because of “deteriorating financial conditions.”
According to facts disclosed at the lottery hearing, The Greenbrier’s current liabilities jumped from $90 million in 2024 to $260 million in 2025, and the company now has $240 million in negative working capital.
In a July 10 letter from Acting Lottery Director David R. Bradley to defense counsel Steven Ruby, the Lottery told The Greenbrier its submission regarding the refinancing is incomplete, identifying missing items such as a completed acquisition application, purchase agreement, operating agreement, financial information and key personnel information.
Based on the current status of the license renewal, Bradley said it is “unlikely” the matter will be presented to the Lottery Commission before its regularly scheduled August meeting “at the earliest.”
Bradley further warned it would be difficult to conclude The Greenbrier has “financial integrity” or “adequate capital” if the proposed refinancing does not address all outstanding debt, stating that a deal that allows GHC to take on new debt without eliminating existing obligations “will only compound the problem instead of resolving it.”
He also said it would be “contrary to the financial watch” and difficult to stand by any agreement that does not account for all outstanding liabilities.
In the filing, White Sulphur Springs Holdings also tells U.S. District Judge Frank Volk about two new actions against the Oakhurst Club, one of the defendants in the case.
Earlier this month, the Oakhurst Club was sued in two new actions in the Greenbrier County and Monroe County alleging it received a fraudulent transfer of collateral from James C. Justice Companies that secures the WSSH‑owned judgments, and the lawsuits have been filed against the collateral.
The response also cites a July 10 federal court opinion from Kentucky in New London Tobacco Market et al. v. Kentucky Fuel Corp. et al. that found “the companies owned and controlled by the Justice family … are the alter egos of the defendants’ entities shareholders – namely (James C. Justice III) and Jill Justice.” James C. “Jay” Justice III is Sen. Justice and Cathy Justice’s son, and Jill Justice is their daughter.
In that same order, the Kentucky court directed Sen. Justice to pay sanctions for the full amount of the amended judgment – more than $17,610,900 plus interest – along with attorney fees and court costs exceeding $194,528.95.
The July 15 response is framed against defendants’ third status report filed July 10.
In that report, the defendants told the court their long‑promised financing transaction with Kennedy Lewis Investment Management “is proceeding as expected,” and they “believe that the transaction will be completed within or shortly after the time indicated in the May 30 Order.”
The Justice entities say the primary transaction documents are “substantially completed,” materials have been submitted to the Lottery regarding The Greenbrier’s casino license, payoff amounts have been obtained from creditors and a pre‑closing internal reorganization of several entities and affiliates has begun.
They said remaining work consists largely of finalizing supporting documents, schedules and closing deliverables, and they anticipated closing the deal by the week of July 20, “subject to the WVLC’s review timeline and any further discussions between the parties to this case.”
Volk’s May 30 memorandum opinion had said defendants “repeatedly assert the financing transaction should be completed by the end of June,” and set an expectation that closing would occur by July 16. White Sulphur Springs Holdings points out that defendants’ timeline already has “been delayed by almost a month (or more)” and now hinges on regulatory review and negotiations with the holding company.
The holding company also says the defendants’ description of what the refinancing would mean for the litigation has “materially evolved.”
In their earlier motion to continue deadlines, defendants told the court that “as of May 21, 2026, defendants have obtained a term sheet for new financing that will allow them to repay the total amount of debt that (WSSH) claims it is owed” and “that repayment will moot all pending motions and resolve this action.”
But the July 10 status report lists “any discussions that may occur between the parties to this case regarding resolution of their respective legal claims” as a precondition to closing. White Sulphur Springs Holdings argues this language now “suggests that rather than satisfying the final and non‑appealable judgments, as well as their ever‑increasing financial obligations to WSSH, defendants may precondition payment on unspecified negotiations with WSSH, or further litigation.”
White Sulphur Springs Holdings also says, despite defendants’ repeated emphasis on the “complexity” of the roughly $500 million refinancing, none of the routine steps WSSH would expect in a large‑scale payoff of senior secured debt have occurred.
According to the filing, Kennedy Lewis Investment Management has not contacted the holding company about basic closing mechanics such as a payoff amount, escrow agreement form, lien release forms or a closing checklist.
White Sulphur Springs Holdings says it has no knowledge of any concrete details of a refinancing or full payoff of the judgments beyond a redacted term sheet and the previously filed status reports. The holding company also notes that no title company or escrow agent has reached out about paying off the judgments or releasing its security interests in the collateral.
In addition, White Sulphur Springs Holdings says The Greenbrier “unilaterally cancelled $100 million of insurance that WSSH placed on the property to protect its collateral, leaving The Greenbrier substantially underinsured.”
Taken together, the holding company contends the recent developments “appear likely” to have “materially prejudiced” its senior secured position and the pledged collateral.
“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,” the filing states.
White Sulphur Springs Holdings is being represented by Seth P. Hayes, Zachary H. Warder, Ellen S. Cappellanti, Albert F. Sebok and Elizabeth B. Elmore of Jackson Kelly.
U.S. District Court for the Southern District of West Virginia case number 5:26-cv-257
