By Steven Allen Adams
For The Intelligencer
Charleston – Attorneys for U.S. Sen. Jim Justice and his family provided a redacted term sheet for a possible new loan to pay off remaining debts owed by the Greenbrier Resort and related properties to a federal judge by a Wednesday deadline while seeking to keep other details private.
In a filing late Wednesday, attorneys for the Justice family submitted a redacted term sheet to U.S. District Court Judge Frank W. Volk for a pending new financing agreement announced last week by the Justices in order to pay off the remaining loan debt on the Greenbrier properties owed to White Sulphur Springs Holdings LLC and its parent company, Texas-based TRT Holdings.
According to a press release last Friday, the new financing would satisfy the remainder of the White Sulphur Springs Holdings loan — approximately $289.5 million that was purchased by TRT Holdings in March from Virginia-based Carter Bank and Trust — as well as provide funding for needed capital improvements to the historic hotel. However, that press release provided no details on who the lender was or how much the agreement would provide.
According to the redacted term sheet, the proposal is between the Justice family and New York-based Kennedy Lewis Investment Management, which provides private credit to companies “undergoing transition, disruption, or facing complex regulatory and cyclical challenges,” according to the company’s website.
The redacted term sheet outlines a $500 million non-binding financing proposal by Kennedy Lewis. The proceeds from the loan would be used to refinance existing debt secured by the Greenbrier Resort and connected properties, as well as land and timber assets owned by the Justice family. The Justices would be required to create a new holding company and provide Kennedy Lewis first-lien collateral on all significant resort properties.
While many terms regarding interest rates and repayment schedules are redacted, the agreement includes a 45-day exclusivity period and strict confidentiality requirements. The final loan agreement has yet to be finalized.
WSSH filed a lawsuit in April in U.S. District Court for the Southern District of West Virginia. Attorneys for WSSH are asking Judge 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 Greenbrier’s operations.
In a ruling Tuesday, Volk granted a 60-day continuance in the case sought by the Justice family last week but also ordered attorneys for the family to file on or before Wednesday the redacted loan term sheet and any requests for certain loan details to be viewed by Volk in private and not be publicly disclosed.
The Justice family filed a motion to submit their full term sheet under seal for review by Volk Wednesday night along with their redacted loan term agreement. Attorneys for the Justice family argue that revealing sensitive economic terms, such as pricing structures and collateral arrangements, would function as a “map” for competitors and litigation adversaries to undermine their business.
“The term sheet contains highly sensitive financial and business information and trade secrets of the type that companies generally keep confidential, for good reason,” wrote attorneys Steve Ruby and H. Rodgin Cohen. “If the information were made public, competitors would be able to exploit their possession of this information by, for example, offering terms superior to those of the financing partner – based on the proprietary information contained in the term sheet – in other transactions in which the financing partner might seek to participate.”
TRT Holdings is also the parent company of Omni Hotels and Resorts, with more than 50 hotels and luxury properties, including the nearby Omni Homestead Resort in Hot Springs, Va. In a separate case pending in Greenbrier County Circuit Court, 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.
According to previous court filings, representatives of TRT Holdings and the Justice family attempted to negotiate a deal where TRT agreed to forgive the remaining loan debt in exchange for a 50% stake in the Greenbrier. But that deal fell through, with WSSH deciding to take the matter to federal court.
“It is undisputed that Plaintiff is affiliated with Omni Hotels & Resorts, which owns and operates The Homestead Resort in Hot Springs, Virginia – The Greenbrier’s most significant competitor,” Ruby and Cohen wrote. “Plaintiff’s affiliates thus are competitors of both Defendants and of Defendants’ financing partner. Were Plaintiff to obtain access to the term sheet, it would be able to exploit the trade secrets contained therein to the commercial detriment of Defendants and Defendants’ financing partner.”
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