Judge grants Justices reprieve in bid to close on financing, stop Greenbrier takeover

The Justice family and six of their Greenbrier-tied firms last week submitted a proposed financial term sheet, revealing it to be a nonbinding pact with Kennedy Lewis Investment Management LLC, a New York City-based private credit lender and asset manager founded in 2017.

The term sheet, addressed to “Senator Justice,� proposes a $500 million loan for Justice Family Group LLC holdings to be secured by a “pledge of the equity� of the borrower and all its subsidiaries and by all Greenbrier assets, personally guaranteed by a party redacted from public view.

The borrower would be a new subsidiary in the Justice business empire called Greenbrier TopCo.

White Sulphur Springs Holdings LLC, affiliate of Dallas-based, international hotel chain Omni Hotels and Resorts, had asked the court to immediately appoint a receiver over Justice family companies tied to The Greenbrier with the authority to seize control of the firms, assets and operations, the right to start further legal proceedings regarding other non-debtors, and a permanent injunction to prevent the Justices and their current businesses from any actions that hinder the receiver’s authority to operate the companies.

The request from the newly formed White Sulphur Springs Holdings follows its buying $289 million in loans, subsequently reduced to judgments, related to entities in which Justice had an interest, according to a U.S. Securities and Exchange Commission filing in March from the seller of the loans, Carter Bankshares Inc., parent company of Martinsville, Virginia-based Carter Bank.

The Justices had asked the court to put on hold all briefing deadlines for 60 days and hold off on hearings scheduled for June 1 and June 8.

White Sulphur Springs Holdings wasn’t satisfied with the proposed financial terms with Kennedy Lewis Investment Management, asking the court to reject the motion by the Justice defendants to put key upcoming case dates on hold to allow them to obtain the financing to pay off the company, asserting to the court the Justices merely were trying to delay paying what they owe.

But Volk on Saturday sided with the Justices — but with a warning that the extended time to close the deal will only last so long.

Volk required the Justice defendants to file status reports on June 14 and July 3 updating the court on progress made toward closing the financing transaction with an expectation that closing will occur by July 16.

If the transaction is called off before closing, the Justice defendants must notify the court within 24 hours and be prepared to proceed to hearings and other case events to be set in a revised order.

Volk cautioned that if the Justices seek further extensions for more extended negotiations or new ventures with other lenders, “the balance of prejudice will likely shift rather abruptly.�

Volk ruled that receivership, as sought by White Sulphur Springs Holdings, “is an exceptionally serious matter� and “the corporate equivalent of martial law� — one that the Justices were entitled “a final attempt to avoid� rather than “divesting [them] of their highly prized, historic, and long-held assets.�

Testimony: Greenbrier value dropping, cash flow diverted  

Justice bought The Greenbrier, a 660-room luxury destination resort in White Sulphur Springs, out of bankruptcy for nearly $23 million in 2009.

Justice pledged that he would put his children in charge of his family’s business operations upon becoming West Virginia’s governor in 2017. Justice has suggested in interviews and court proceedings after he became governor that he remains familiar with his coal companies’ operations.

White Sulphur Springs Holdings submitted testimony late Friday from real estate valuator Mark Dunec, senior managing director at FTI Consulting, Inc., a global business advisory firm, that the value of The Greenbrier, a 660-room luxury destination resort in White Sulphur Springs, has plummeted to roughly $360 million as of April 2026 since a 2023 appraisal pegged it at a prospective market value of $597 million. Dunec reported an occupancy decline from 50.7% in 2022 to 41.5% in 2025 and drop in revenue per available room from about $236 in 2022 to $180 in 2025.

White Sulphur Springs Holdings also submitted testimony late Friday from certified public accountant Brian Ong, another FTI Consulting senior managing director, that from 2017 to 2024, over $204 million – 96% of Greenbrier firm parent company Justice Family Group cash flow – was transferred to parties outside Justice Family Group, including coal mining and agricultural entities unrelated to the Greenbrier Resort.

Justice Family Group’s operating cash flow isn’t enough to cover interest accruing on outstanding judgments, Ong testified.

“[N]umerous risk indicators raise concern regarding the Defendants’ ability to service the outstanding debt and properly maintain the operation of the Greenbrier Resort,� Ong said in the written testimony.

Financial term sheet heavily redacted

The proposed term sheet would require that the Justice family would direct Justice Family Group to move all equity interests in Greenbrier Resort assets, adjacent development projects, land and timber farms as agreed with Kennedy Lewis Investment Management, or KLIM, to the newly formed Greenbrier TopCo.

The proposed term sheet lists “loan A� and “loan B� options each for a redacted amount of millions of dollars, interest rate, up-front fee, maturity and draw availability period.

The 12-page sheet is signed by Justice and David Chene, KLIM cofounder, co-portfolio manager and co-managing partner.

The Justices said in a Wednesday filing the agreement’s planned financing provision of up to $500 million represents less than 5% of the financing partner’s assets under management, which the filing contended would “remov[e] any doubt about the financing partner’s ability to close.�

The Justices have sought confidential treatment for the term sheet, saying it contains “highly sensitive financial and business information and trade secrets.�

White Sulphur Springs Holdings added that it believes “there is a significant probability that the lender will simply walk away from this transaction without liability� when “the full magnitude of The Greenbrier debts, deferred maintenance and capital expenditure deficiencies are uncovered in due diligence.�

White Sulphur Springs Holdings has argued that a receivership is merited by what it has called the Justice family’s “considerable mounting legal and financial issues,� including:

• A November agreement Justice and his wife Cathy struck to pay $5.1 million in unpaid federal income tax assessments after the IRS sued the couple over what it said was an outstanding balance of $5,164,739 in unpaid federal income tax assessments for the 2009 tax year
• A December federal court filing from Louisiana-based First Guaranty Bank indicating the Justices’ Greenbrier Hotel Corp. owed a debt that had ballooned to more than $47 million and was growing by more than $20,000 a day, accruing from a loan the bank made to the company under a lending program established through the CARES Act
• Two Kentucky companies, New London Tobacco Market Inc. and Fivemile Energy LLC, presenting evidence to contend last month that Justice’s business empire has been hiding hundreds of millions of dollars in assets in a federal court case in which they have been trying for years to collect on an eight-figure judgment against Justice-controlled firms
• The Greenbrier Clinic failing to meet federal clinical image quality standards for mammograms, resulting in the suspension of all mammography operations at the facility and federal class-action litigation filed against the Clinic in April and May

The Justices previously asked the West Virginia Southern District to stand down in its consideration of the case until the Greenbrier County Circuit Court decides whether White Sulphur Springs Holdings has a right to enforce the loan agreements and thus pursue a receivership in a pending case the Justices have filed in the circuit court to try blocking the Omni affiliate’s takeover push.