The Greenbrier Hotel, located in White Sulphur Springs, W.Va., is set to go to public auction Aug. 27 because of a default. The hotel is owned by Gov. Jim Justice and run by his family. (Getty Images)
As financial struggles and allegations against companies owned by Gov. Jim Justice and his family continue to build — with new developments this week showing the Greenbrier Hotel Corporation is four months delinquent on payments to its employee health fund — the West Virginia Democratic Party on Tuesday called for Justice to drop out of his race for U.S. Senate.
Justice, who is the Republican nominee for the seat currently held by Sen. Joe Manchin, I-W.Va., is a heavy favorite to win the race in the November general election. He’s facing former Wheeling Mayor Glenn Elliott, a Democrat.
In a news release Tuesday, state Democratic Party Chair Del. Mike Pushkin said the latest news on The Greenbrier — which was first reported by RealWV, a Greenbrier County-based news outlet — is further evidence of the governor’s “imploding financial empire.”
“His financial house of cards is falling down around him, making him a terminally compromised candidate,” Pushkin, D-Kanawha, wrote in the release. “Under these circumstances, [Justice] can’t continue to seek election to the United States Senate. He has become a national embarrassment.”
The Real WV reported Monday that hotel employees who are covered by the company’s health insurance plan received a letter saying they may lose health coverage on Aug. 27 if mandated contributions are not made by the Greenbrier Hotel Corporation, a Justice family-owned company.
In the letter, Ronald Richman, an attorney Schulte Roth & Zabel LLP representing the Amalgamated National Health Fund, wrote that the Greenbrier Hotel Corporation is four months delinquent in contributions to the health fund. The company owes about $2.4 million in delinquent contributions, with another $1.2 million soon to be due.
The Greenbrier’s delinquent contributions include contributions that were taken out of employees’ pay but not remitted to the Health Fund, the attorney wrote.
“It’s one thing to default on a bank loan or a tax obligation or even a fine from a regulatory agency,” Pushkin said. “It’s another thing altogether to fail to pay the health care premiums for your workers with money that isn’t even yours.”
In a news release Monday , Peter Bostic, the chairman of the Greenbrier Council of Labor Unions, said the unions representing employees at the hotel were heartbroken and disappointed to learn that the Greenbrier is severely delinquent to the health insurance carrier.
“The Greenbrier’s delinquency has put our Member’s Health Care benefits in severe jeopardy and is morally and legally wrong,” Bostic wrote. “Our members have met their obligation by working hard every day and paying their portion to the Greenbrier. The Greenbrier has neglected its obligation to its employees.”
The Council of Labor Unions represents seven separate unions with workers at The Greenbrier. In separate legal filings, attorneys for The Greenbrier Hotel Corporation say the company directly employs “nearly 2,000” people. According to the letter from Richman, health coverage for all those covered employees will be suspended if payments are not made by the company on Aug. 27.
Justice family attorneys file to halt Greenbrier auction
While employees worry about the fate of their health coverage, they will also have another question looming over them that same day: who will own The Greenbrier Hotel if it goes up for public auction as it’s scheduled to at 2 p.m. on Aug. 27 on the Greenbrier County Courthouse steps?
The Greenbrier Hotel Corporation on Monday filed a motion for a temporary restraining order and preliminary injunction to keep the hotel from being auctioned off as planned. The company argues, among other things, that the sale of the property would “irreparably harm” the Justice family companies as the assets that could be sold are unique and irreplaceable.
They also argue that Justices’ son, Jay Justice, and daughter, Jill Justice, are the majority owners of Greenbrier Hotel Corporation, but neither approved of the deed of trust, and that the notice of the sale published in the West Virginia Daily News failed to list all the parties to the deed.
A hearing on the motion is set for 9 a.m. Friday before Greenbrier Circuit Judge Robert Richardson.
The auction of The Greenbrier was first announced in a legal advertisement placed in Lewisburg’s West Virginia Daily News earlier this month. At auction, according to the ad, the property will go to the highest bidder with cash-on-hand.
The property being auctioned totals 60.5 acres and is not the entirety of The Greenbrier resort in White Sulphur Springs. It excludes several amenities, including golf courses, cottages, water tanks and several other pieces of land. Those properties are owned by other Greenbrier-related companies, which are also largely owned by the Justice family.
If the hotel and parking lots are auctioned off and separated from those amenities, attorneys for the company said those other companies would suffer greatly.
“The threatened sale therefore would partition The Greenbrier resort in a manner that would be catastrophic to The Greenbrier’s business,” the attorneys wrote. “Golf and other amenities are a primary reason that guests patronize The Greenbrier. Many guests patronize The Greenbrier because of the opportunity to stay in its cottages. The sale would leave The Greenbrier without a place to park guests’ vehicles during its busy peak season. And all guests use water; the loss of The Greenbrier’s water supply would leave it unable to operate at all.”
The auction comes after The Greenbrier Hotel Corporation defaulted on millions of dollars in bank loans. The Greenbrier Hotel is one of the largest assets owned by the Justice family’s conglomeration of businesses.
Justice has repeatedly and adamantly claimed that the move to put The Greenbrier under foreclosure, as well as other challenges that have come against his family businesses, are nothing more than political attacks .
“This is all about Jim Justice being the one that flips the United States Senate,” Justice told reporters on a news briefing earlier this month . “It’s about trying to twist Jim Justice or hurt Jim Justice from a political standpoint, there is no question whatsoever that it’s about anything but that.”
Justice also continues to assert that he is not involved in his family’s businesses. In response to news earlier this month that the federal government is asking a court to hold 23 of the Justice family’s coal companies in contempt for millions in unpaid mine health and safety fines, Justice said he is “not involved in anywhere close to the daily operations” of the companies.
Instead, he says, his children are at the helm of all of the family companies.
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