By Steven Allen Adams
For The Parkersburg News and Sentinel
Charleston – The family of U.S. Sen. Jim Justice has until this morning to explain why a federal judge should not move forward with a case by The Greenbrier Resort’s current lender seeking to wrest control of the historic hotel.
U.S. District Court Judge Frank W. Volk issued an order to show cause to attorneys representing the Justice family in a Sunday night filing. Volk is asking the Justices’ attorneys to explain why the case filed against the Justice family by White Sulphur Springs Holdings LLC, a company set up by Texas-based TRT Holdings LLC after the company bought the Greenbrier’s debt, and should not move forward.
Volk issued a memorandum order on May 30 granting a request by the Justice family to halt proceedings in the federal case and gave the family until July 16 to close on a new financing deal with New York-based Kennedy Lewis Investment Management. But Volk warned the Justices that “the balance of prejudice will likely shift rather abruptly” if the closing went beyond July 16.
Attorneys for the Justice family have provided several status updates on the progress toward closing the deal with KLIM, which could provide up to $500 million to refinance the Greenbrier’s existing debt and provide needed funds for capital improvements. But in a July 10 update, the Justices warned that “due to the complexity of the transaction,” it might take longer than July 16, pushing back the potential for a closing until sometime this week.
In his Sunday order, Volk noted that while the Justice family said it would need more time in its July 10 filing, their attorneys made no request to extend the July 16 deadline.
Volk also gave parties in the case until 5 p.m. Wednesday to respond to a request by Fivemile Energy LLC and New London Tobacco Market Inc. to intervene in the case. The two companies made the filing Friday in order to seek to protect their interests regarding millions owed to them by the Justice family.
Fivemile Energy and New London Tobacco Market have been fighting with several Justice-owned coal mining companies for 15 years, ultimately winning a judgement of $35 million. But the companies have continued to clash with the Justices, who have refused to pay. Last week, a federal judge in Kentucky issued an opinion and order, including the payment of sanctions by Sen. Justice’s son Jay Justice.
In that case, U.S. District Judge Gregory F. Van Tatenhove pierced the corporate veil of the Justice family’s more than 160 companies, accusing them of being alter egos of the Justice family itself, opening the door to holding Sen. Justice and other family members directly responsible for court judgments rendered against specific businesses.
Fivemile Energy/New London Tobacco Market would be joining the West Virginia Tax Division as intervening parties in the case. According to court filings, the Tax Division has several multi-million-dollar tax liens against Justice-owned businesses.
TRT Holdings purchased the Greenbrier’s remaining loan debt from Virginia-based Carter Bank and Loan in March, setting up WSSH to manage the purchased loan. WSSH filed a lawsuit against the Justice family in April in U.S. District Court for the Southern District of West Virginia after negotiations with the Justice family fell through and the loan went into default.
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. TRT Holdings is 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.
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