Justices face federal court order that could hasten Greenbrier empire takeover

In a rare Sunday filing, U.S. District Court for the Southern District of West Virginia Chief Judge Frank Volk ordered the Justices to “show cause in writing� by 8:30 a.m. Tuesday why the court shouldn’t proceed toward “prompt adjudication of the merits.�

Such a move would lift the pause on the case that Volk granted the Justices in a May 30 order that set a July 16 expectation date for the deal closing they proposed to refinance a nine-figure debt claimed by the plaintiff company seeking the Greenbrier portfolio takeover, White Sulphur Springs Holdings LLC.

A recently formed affiliate of Dallas-based international hotel chain Omni Hotels & Chains, White Sulphur Springs Holdings bought $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.

White Sulphur Springs Holdings in April 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.

White Sulphur Springs Holdings has sought court approval of an order it has proposed to give the family and their Greenbrier firms three days to deliver all property to a receiver, including all keys to the estate, financial records, bank accounts, Greenbrier Resort employee roster and payroll information, and an equipment and inventory list.

Volk granted his pause on the case on May 30 following a May 22 request from the Justices to put on hold briefing deadlines and scheduled hearings in the case to allow them to finalize a deal in line with a nonbinding agreement on terms with a partner for financing to repay the balance of loans claimed by White Sulphur Springs Holdings, with the transaction then expected to close in late June.

But Volk warned the Justices the extended time to close the deal would only last so long, setting an expectation that closing would occur by July 16.

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.�

The Justices subsequently in May revealed the nonbinding pact to be with Kennedy Lewis Investment Management LLC, a New York City-based private credit lender and asset manager founded in 2017, for a $500 million loan for Greenbrier holdings firm Justice Family Group LLC 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.

Judge cites Omni affiliate arguments in order

But what Volk had essentially established as a July 16 deadline for closing the deal passed without such a deal in place.

In a July 10 filing, the Justices said they may need more time than allotted partly because of a West Virginia Lottery Commission “review process.�

The Justices said materials had been submitted to the commission for its review of the proposed transaction as it relates to The Greenbrier’s casino license.

The West Virginia Lottery Commission put the Greenbrier Hotel Corp. on “financial watch� at the end of last month, which was when the company’s casino license came within hours of expiring after the firm’s failure to submit required audit information that Lottery Commission officials said was due around March 20 to allow ample time before the June 30 license expiration.

But the Lottery Commission on June 30 renewed the company’s casino license at an emergency meeting with hours before the license was to expire after the commission said it received the audit information.

Justice family business attorney Steve Ruby told the Lottery Commission at a meeting that “a significant amount of staff turnover� this year “created difficulties for the accounting and finance departments,� resulting in The Greenbrier’s delay in submitting the required information.

The Justices said other work remaining before closing the Kennedy Lewis Investment Management deal included completing supporting transaction documents and finishing an internal reorganization of some of their entities and affiliates. They reported the transaction “should be able to be closed by the week of July 20, 2026.�

That didn’t satisfy White Sulphur Springs Holdings, which alluded in a July 14 filing to a July 10 letter from West Virginia Lottery Acting Director David Bradley telling Ruby additional items necessary for a West Virginia Lottery review process regarding what Bradley called "proposed acquisition and re-organization of the Greenbrier Hotel Corporation" included a completed acquisition application, purchase and operating agreements, and financial and key personnel information.

"A predominant concern is your considerable debt," Bradley wrote, citing tax lien notices issued days after the Lottery Commission renewed the Greenbrier Hotel Corp.'s casino license.

The IRS filed federal tax lien notices this month against the Greenbrier Hotel Corp. and Greenbrier Clinic for $3,334,736 and $289,893 in unpaid assessments, respectively.

The notices indicated unpaid assessments were for federal income, Social Security and Medicare taxes withheld from employee paychecks, and for provision of funds for paying unemployment compensation to workers who have lost their jobs.

The Greenbrier Hotel Corp. unpaid assessments were for tax periods ending June 2024 through Dec. 31 last year.

Citing state code, Bradley noted that Greenbrier Hotel Corp.'s casino license is a "revocable privilege" that is "conditioned upon [the licensee's] continuing eligibility, qualifications, and suitability," and that a gaming facility operator must show sufficient "character, reputation, experience and financial integrity" and "adequate capital to construct and maintain the proposed gaming facility for the duration of [the] license."

White Sulphur Springs Holdings expressed skepticism in its Wednesday filing that the Justices’ proposed transaction will materialize based on the delay in their timeline and that what it called “routine processes� tied to a $500 million debt refinancing hadn’t occurred.

Those processes included Kennedy Lewis not contacting White Sulphur Springs Holdings regarding the payoff amount, escrow agreement form, release of lien forms or closing checklist and no title company or escrow agent contacting White Sulphur Springs Holdings concerning the payoff of the judgments in full or the release of the company’s security interests in the collateral securing the judgments.

Volk cited those points in his Sunday order.

Kentucky firms' bid to crash case addressed

Volk’s order also gave case parties until 5 p.m. Wednesday to respond to a motion to intervene in the case filed Friday by two companies looking to protect their interests amid a decade-plus-long legal history with Justice family coal firms.

New London Tobacco Market, Inc. and Fivemile Energy, LLC filed the motion to intervene a week after a July 10 U.S. District Court for the Eastern District of Kentucky order requiring Justice's son Jay Justice and fellow Justice coal company executive Stephen Ball to each pay the full amount of a roughly $18 million judgment the court entered in 2024 against two Justice family-controlled companies, plus more than $564,000 in court contempt sanctions the pair of executives have been under for the past two years.

That ruling was rooted in the court’s September 2014 order granting a default judgment to the plaintiffs, New London Tobacco Market Inc. and Fivemile Energy LLC, who brought the case in 2012 after a Justice family firm, Kentucky Fuel Corp., failed to mine coal under an agreement following the plaintiffs’ assignment of rights to mine coal in eastern Kentucky to the defendants in exchange for a cut of the mined coal.

In 2023, the plaintiffs were awarded more than $18 million in lost tonnage royalties, attorney expenses and unpaid retainer fees, plus interest.

The companies “engaged in abusive practices� to frustrate the plaintiffs’ ability to gather related evidence, the court had found in a July 2024 order.

New London Tobacco Market and Fivemile Energy cited the July 10 Kentucky Eastern District Court order and lawsuits they filed in Greenbrier and Monroe county circuit courts this month, alleging that another Justice company, James C. Justice Holdings, Inc., engaged in fraudulent transfers with the White Sulphur Springs Holdings case defendants regarding property at issue in the proposed receivership.

James C. Justice Holdings fraudulently transferred properties to another Justice firm, Oakhurst Club LLC, spanning a combined 505 acres in Monroe and Greenbrier counties via quitclaim deeds since the Kentucky firms were present or future creditors amid their already existing litigation against James C. Justice Holdings.

If the proposed receiver would fail to satisfy New London Tobacco Market and Fivemile Energy’s claims, there may not be enough assets remaining in the defendants’ estate to satisfy the outstanding judgment once White Sulphur Springs Holdings’ claims are resolved, the Kentucky firms said in their Friday filing.

Those two firms have joined the West Virginia Tax Division as parties that have submitted filings seeking to intervene in the case.

The Tax Division asked the court for approval to intervene in the case in May after issuing 10 tax lien notices to the company from December 2025 to April 2026 indicating the firm owed the state more than $4.4 million. That sum consisted of just over $3.98 million in sales and use tax and related interest and penalties, plus another roughly $455,000 in personal income tax and related interest and penalties.

Tax Division said that it wants to intervene in the case to protect its liens and “preserve their statutory priority.� The court has not yet ruled on the tax unit’s or Kentucky firms’ intervention requests.