Bank suing Greenbrier Hotel Corp. for alleged loan repayment failure

GREENBRIER COUNTY, W.Va. (WOWK) — A Louisiana-based bank is suing the Greenbrier Hotel Corporation (GHC) for more than $35 million for allegedly failing to repay a loan taken out during the COVID pandemic.

According to court documents, GHC allegedly agreed to the terms of a promissory note in 2020, where they would repay a loan from the First Guaranty Bank (FGB) in the principal amount of $35 million at an indexed variable rate.

The loan, referred to as the Main Street Loan by court documents, was issued under the provisions of the Main Street Lending Program of the Federal Reserve and authorized under the Coronavirus Aid, Relief and Economic Security Act (CARES Act).

FGB alleges that GHC failed to make any payments on its loan when the first installment came due.

While GHC did not have to make any payments during the first year of the loan, after the first year, it was obligated to make monthly interest-only payments on the accrued interest starting in 2022.

The note also required GHC to pay three installments of the loan principal:

1. On December 22, 2023, in the amount of 15% of the outstanding principal balance (including any capitalized interest).
2. On December 22, 2024, in the amount of 15% of the outstanding principal balance (including any capitalized interest).
3. On December 22, 2025, in the amount of the remaining total balance.

The loan was declared delinquent on December 22, 2023, when GHC allegedly failed to pay the first required installment. As such, FGB declared under the rights granted by the note to:

1. Default the loan.
2. Accelerate the maturity of the remaining balance of the loan.
3. Increase the interest rate on the remaining balance, effective as of July 15, 2024, to 21% per year.

FGB claims in the court documents that it is owed the remaining loan repayment balance — made up of the principal, accrued interest, late charges and expenses — at a total of $36,586,412.22, as of July 15, 2024. Interest continues to accrue at a rate of 21% per year, or $20,626.90 per day.

The lawsuit comes as the Greenbrier Resort is going up for auction due to issues with the payment of a different loan and as employees are at risk of losing their benefits . 12 News’ Charleston-area affiliate, 13 News reached out to the representatives of Greenbrier owner Jim Justice for comment late Tuesday evening but has not yet heard back.

For the latest news, weather, sports, and streaming video, head to WBOY.com.