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Greenbrier Hotel seeks case dismissal after property sold via out-of-court stock transaction
By Caroline Salls
Pittsburgh, May 8 - Greenbrier Hotel Corp. has asked the U.S. Bankruptcy Court for the Eastern District of Virginia to dismiss its Chapter 11 bankruptcy case because its going concern asset sale was completed through a stock transaction "outside of the purview of the bankruptcy court," according to a Friday court filing.
According to the motion, the company filed for bankruptcy solely to complete a sale or restructuring transaction that would ensure The Greenbrier continued to operate as a going concern.
Although it originally planned to sell The Greenbrier to Marriott under a bankruptcy sale process, the company said the property was sold to a new entity formed by James C. Justice II, James C. Justice III and Jillean L. Justice through a stock transaction between former parent company CSX Corp., its financial adviser and the Justices.
Greenbrier said it was not a party to the stock purchase agreement.
Greenbrier said its new owner will make sure that the company satisfies its existing third-party debt, so "the bankruptcy cases no longer serve any necessary restructuring purpose."
In addition, the new owners have agreed to pay the break-up fee and expense reimbursement owed to Marriott.
"Absent dismissal of the bankruptcy cases, the debtors will be forced to prosecute these bankruptcy cases for several more months to achieve confirmation of some yet-to-be-drafted stand-alone Chapter 11 plan - which would simply seek the reinstatement of all debt obligations in the ordinary course and thus would not provide a better result for creditors than dismissal," the company said in the motion.
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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