Greenbrier Resort Files Chapter 11 Bankruptcy
Is nothing sacred? What with Ferreti yachts going broke, Donald Trump being sued after the failure of his Baja Hotel condo complex, and the Royal Bank of Scotland being conned out of £4.5 million – the latest in a seemingly endless line of high profile bankruptcies is the Greenbrier resort in West Virginia.
Greenbrier resort filed for Chapter 11 bankruptcy protection last week and unveiled a deal to sell itself to hotel giant Marriott International Inc. for up to $130 million. Marriott would receive $50 million over two years from current owner CSX Corp. to operate the resort, according to The Greenbrier. Marriott would pay the Jacksonville, Fla.-based railroad operator between $60 million and $130 million within seven years. The deal is expected to close later this year.
If the deal receives bankruptcy court approval, Bethesda, Md.-based Marriott would be getting a fabled four-star resort whose roots go back to the 18th century and whose guests have included President Eisenhower and Monaco's Prince Rainier and Princess Grace. It is also the site of a once-secret Cold War bunker built to house Congress in case of a nuclear attack.
Greenbrier lost $35 million last year and the bankruptcy filing shows that trend is accelerating fast. Monthly revenue plummeted approximately 63% to just over $1 million in February, from more than $2.7 million in January, according to a financial statement included in the bankruptcy filing. The document puts the resort's pretax loss at $3.74 million in January and $4.96 million last month.
The filing estimates the resort's assets are worth between $50 million and $100 million. It owes between $100 million and $500 million to more than 5,000 creditors.
"CSX is pleased that the Greenbrier has been able to make progress in very difficult circumstances. The potential outcome of this transaction would help preserve an important and historic property in West Virginia," CSX spokesman Garrick Francis said.
CSX's fourth-quarter earnings sank 32 percent last year, mostly due to a sizable writedown on the value of The Greenbrier.
Greenbrier President Michael Gordon called the deal, which is expected to close later this year, "a great outcome for everyone associated with" the luxury resort.
A spokesman for the Council of Labor Unions, which represents more than half the resort's 1,100 workers, did not immediately respond to a request for comment. The unions have been trying to reach a new collective bargaining agreement with The Greenbrier for more than a year and it looks as though the deal hinges on negotiating a new labor deal, as well as approval by the bankruptcy court. At least Donald Trump didn't get his hands on it. 
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