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W.Va. Lottery Commission approval clears way for new Greenbrier joint venture with Justice family

By Steven Allen Adams 5 min read

CHARLESTON - A deal between the family of U.S. Sen. Jim Justice and New York-based financial firm Kennedy Lewis Investment Management for the historic Greenbrier Resort was already finalized, but the West Virginia Lottery Commission has formally approved the new ownership group.

During its regular monthly meeting Wednesday afternoon, the Lottery Commission voted unanimously to approve the Greenbrier Resort's financing transaction between the Justice family and Kennedy Lewis Investment Management and change ownership and control in the associated board, which places KLIM in majority control of the hotel and casino.

"Our staff’s looked at this and spent a lot of time on this … It was a huge transaction. It was a lot of paperwork. It was a lot of information that had to go back and forth," said acting Lottery Director David Bradley. "I know this is a new direction that the Greenbrier is going in, which makes us excited. And it is a crown jewel of our state … We talk about all the good, but the main thing is that I think that they bring stability in ensuring the positive growth to the financial integrity of the Greenbrier, which is what we were looking at."

The Justice family and KLIM announced the finalization of its joint agreement on Aug. 14, after beginning negotiations in May. A redacted term sheet outlined a $500 million non-binding financing proposal by KLIM to pay off major creditors and cover the costs of capital improvements at the resort. The finances would be secured by the resort and connected properties and land and timber assets owned by the Justice family and guaranteed by the senator and other family members.

The Justices and KLIM created a new holding company, with KLIM having 51% controlling interest and the Justice family holding a 49% minority interest. KLIM appointed Lloyd Nathan, with a background in hospitality and gaming with 10 years with MGM Resorts International, as chairman of the Greenbrier’s Board of Directors.

Steve Ruby, an attorney for the Justice family, briefed Lottery Commission members on the specifics of the Greenbrier's new parent company, Greenbrier Holco LLC, which introduced a reformulated governing board featuring industry veterans to oversee the property’s long-term stability.

"This transaction is a huge win for the Greenbrier," Ruby said. "It’s a huge win for the Greenbrier’s employees. It places the institution that is the Greenbrier on a more stable financial footing than it has been in a long time. It’s a win for Greenbrier County, for the surrounding area. It’s a win for the state, and most importantly, for purposes of the decision that the commission is making today, we believe it’s a win for the Lottery."

"Ultimately, what the Lottery wants is financially stable licensees who have the wherewithal to operate their businesses effectively and grow and prosper and ultimately generate gaming revenue for the state," Ruby continued. "That’s what this deal has done, and we respectfully request approval."

A five-member board will oversee the organization, with three seats appointed by KLIM and two by the Justice family. Dr. Jill Justice, Sen. Justice's daughter who previously served as president of the hotel, will fill one of two Justice family seats on the board. The other Justice family seat has not been filled yet, and that person will need to be signed off on by the Lottery Commission.

Ruby said the new deal between the Justice family and KLIM effectively resolves the previous debt crisis involving approximately $380 million held by White Sulphur Springs Holdings, the company set up by Texas-based TRT Holdings, the owners of Omni Hotels and Resorts. TRT Holdings had purchased the Greenbrier's loan debt from Virginia-based Carter Bank and Trust in March. A federal and state lawsuit between the Justices and TRT Holdings was dismissed following the payment of the outstanding debt.

Ruby also said that part of the deal with KLIM involved paying all outstanding county, state and federal tax liens for the Greenbrier and associated resort properties, which he estimated to be more than $10 million.

Questions from commission members largely focused on how the new governance of the Greenbrier and Greenbrier Casino Club would function. But new commission member Matthew Chapman, an attorney with Rawle & Henderson LLP appointed by Gov. Patrick Morrisey at the end of June, began to ask questions about other issues involving the Justice family, including outstanding fines owed to the state Department of Environmental Protection and a separate lawsuit involving a pandemic-era loan with First Guaranty Bank.

"I think we all want the Greenbrier to succeed," Chapman said. "We just want to make sure we're doing our due diligence as the law requires us to do."

"We’ve covered a lot of ground here, but I also think we need to stay focused on what’s under the purview of the Lottery Commission, and that’s the casino at the Greenbrier,” said commission member Andy Knicely. "There’s a lot of things that’s been in the past and different aspects that we have no authority in terms of the financial position of the new entity."

Following Wednesday's vote by the Lottery Commission, Morrisey issued his own statement praising the vote and welcoming the new KLIM Greenbrier management team. The Greenbrier remains on a quarterly financial watch list at the Lottery Commission for the current fiscal year, though the commission's financial staff and its outside accountancy firm said they were comfortable with the new deal with the Greenbrier.

"I am hopeful that the new controlling owner will bring much needed financial stability to the iconic Greenbrier resort," Morrisey said. "While the Greenbrier remains under the Lottery Commission's financial watch, our administration will continue its monitoring of the casino and remain vigilant in our ongoing efforts to protect West Virginia jobs."

"As Lloyd Nathan, the new chairman of the board of the Greenbrier Resort, becomes more acquainted with the Greenbrier Valley, we are committed to working with him to refurbish and enhance this historic property," Morrisey continued.

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