Justices argue debt enforcement efforts are hurting The Greenbrier – WV MetroNews

In a state court venue for a battle for control of The Greenbrier Hotel, lawyers for Senator Jim Justice and his family business continue to press for a preliminary injunction over allegations that debt on the historic resort was transferred improperly.

“Defendants have no interest in collecting on the Loans; they want to take possession of The Greenbrier,” wrote lawyers for the Justices.

The Justices are in a fight with White Sulphur Springs Holdings, an affiliate of Omni Hotel & Resorts, over control of The Greenbrier. The battle recently got the attention of The Wall Street Journal in a story headlined “Two Texas Billionaires, a U.S. Senator and the Battle for ‘America’s Resort.’”

A federal court case has been paused to see through a potential $500 million financing agreement that could pay off the debt.

But a separate state case remains active.

In that one, the owners of The Greenbrier have sued longtime lender Carter Bank & Trust and the owners of White Sulphur Springs Holdings, Texas billionaires Robert and Blake Rowling, on claims that they colluded and improperly used insider information to gain control of the Greenbrier Hotel debt.

“Plaintiffs are not challenging Carter’s general right to assign the Loans,” wrote lawyers for the Justices.

“Rather, Plaintiffs contend that this particular assignment was unlawful because it was facilitated by fraud, breaches of multiple contracts that prevented such an assignment, and the misappropriation of confidential information and trade secrets, which the TRT Defendants obtained under false pretenses, used to facilitate their acquisition strategy, and then sought to leverage through creditor remedies to seize The Greenbrier.”

Lawyers for Carter Bank and White Sulphur Springs Holdings each have taken positions that the state case is without solid grounding. They maintain that the Justices lack standing to challenge the sale of the loans and have failed to demonstrate irreparable harm because their financial difficulties are entirely self-inflicted.

On Friday, lawyers for the Justices filed a reply and wrote, “Defendants’ opposition briefs are works of distraction, advancing a counterfactual narrative and mischaracterizing Plaintiffs’ requested relief.

“Conspicuously absent from those briefs, however, is any serious dispute that Defendants’ actions are inflicting serious irreparable harm on Plaintiffs and The Greenbrier.”

Lawyers for the Justices want to maintain the current operational status of The Greenbrier while the court considers the underlying legal claims. They argue that without an injunction, the holding company’s actions will cause irreparable harm to the resort’s reputation, vendor confidence and future business bookings:

“Regardless of what reputation The Greenbrier previously had (or why), Plaintiffs’ undisputed evidence directly links recent customer and vendor concerns about The Greenbrier to Defendants’ conduct — false assertions that The Greenbrier is in disrepair, freezing accounts, public declarations of default, and the threat of additional creditor remedies.”

The lawyers for the Justices maintain the injunction is necessary because “The public interest is disserved by allowing a party who obtained contractual rights through fraud, contractual breaches, and anticompetitive conduct to exercise those disputed rights before the Court has determined whether that party validly owns those rights.”

The state case was filed in Greenbrier County, home of the resort and Senator Justice.

Both the holding company and the bank cite improper venue, contending that mandatory forum selection clauses in documents signed by the Justices require these disputes to be heard in Virginia or New York rather than West Virginia.

The Justice family argues that the Circuit Court of Greenbrier County is a proper venue for the lawsuit and that objections are “meritless.”

The Justices contend that various overlapping and conflicting forum-selection clauses in the relevant loan and confidentiality agreements point to different jurisdictions. So the Justices argue that these conflicts preclude the enforcement of any single clause, making their chosen forum in West Virginia appropriate.

“On the merits, Defendants say surprisingly little about Plaintiffs’ core allegation that Defendants, through misappropriation of confidential information and violations of contractual standstill restrictions, orchestrated an unlawful sale of the Loans in an effort to seize The Greenbrier,” wrote lawyers for the Justices.

“Instead, Defendants rely on meritless jurisdictional, venue, standing, and collateral-attack arguments. None will succeed.”