Greenbrier Hotel files reorganization, disclosure based on asset sale

By Caroline Salls

Pittsburgh, April 20 - Greenbrier Hotel Corp. filed its plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the Eastern District of Virginia.

The plan is based on the proposed sale of substantially all of Greenbrier's assets to Marriott Hotel Services, Inc.

As previously reported, Marriott expects CSX Corp. to provide $50 million, through an affiliate, to be used in the operation of the resort after completion of the sale.

The Greenbrier Hotel Corp. is a wholly owned subsidiary of the Greenbrier Resort and Management Corp., which is wholly owned by CSX.

The CSX funds would be paid over a two-year period following the closing of the transaction.

In turn, Marriott would pay Greenbrier Hotel between $60 million and $130 million within about seven years, with the actual amount depending on the timing of the payment and the Greenbrier's financial performance.

The company said its exit loans will bear interest at 10%.

Treatment of creditors will include:

• Holders of administrative claims, debtor-in-possession facility claims, priority tax claims and other priority claims will recover 100% in cash;

• Holders of secured claims will be paid in full in cash from plan funds;

• Holders of trade claims, unsecured claims and general unsecured claims will receive a share of an unsecured claims fund;

• Holders of equity interests are not expected to receive any distribution.

According to the disclosure statement, the company is asking the court to rule that the equity interests have no value as of the plan effective date.

The plan confirmation hearing is scheduled for June 17.

The White Sulphur Springs, W.Va.-based Greenbrier Hotel Corp. is a wholly owned subsidiary of the Greenbrier Resort and Management Corp. The company filed for bankruptcy on March 19, and its Chapter 11 case number is 09-31703.

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