Photo by Steven Allen Adams The Robert C. Byrd United States Courthouse in downtown Charleston.

CHARLESTON – U.S. Sen. Jim Justice and his family had until the end of the day Wednesday to submit the terms of an alleged new loan to pay off the remaining debt on the historic Greenbrier Resort and explain why certain details should not be publicly disclosed.

In a memorandum opinion issued late Tuesday, U.S. District Judge Frank W. Volk ordered attorneys for the Justice family to submit a redacted version of the term sheet for the public record and provide a more detailed justification for any specific parts they still wish to hide from view.

“…The term sheet is plainly susceptible to redaction,” Volk wrote. “Redaction is all the more appropriate inasmuch as it is the preferred middle road when one seeks to cordon off court records from the general public. … In conclusion, some further effort toward disclosure is necessary.”

The Justice family – specifically U.S. Sen. Justice, former first lady Cathy Justice and son Jay Justice – have requested a 60-day pause in a lawsuit filed in April in the U.S. District Court for the Southern District of West Virginia by White Sulphur Springs Holdings LLC (WSSH) against the Justices.

WSSH – owned by Texas-based TRT Holdings, the parent company of Omni Hotels and Resort – purchased the remaining loan debt on the Greenbrier from Virginia-based Carter Bank and Trust for $289.5 million. Attorneys for WSSH are asking Judge Volk to appoint a receiver for the Greenbrier and miscellaneous properties and issue a permanent injunction against the Justice family to prevent further interference in The Greenbrier’s operations.

Last week, the Justice family announced it secured new financing to satisfy the remainder of the WSSH loan. While the lender remains unknown, details from court filings show that the potential new financing could be as much as $500 million to cover the remaining WSSH loan and additional funding for capital improvements.

Sen. Justice purchased the Greenbrier from rail company CSX in 2009. Cathy Justice is listed on U.S. Senate financial disclosure reports as operations adviser at the resort. Dr. Jill Justice, the former governor’s daughter, serves as president of the Greenbrier.

While the Justice family has moved to keep this financial document under seal to protect alleged trade secrets, WSSH opposes the delay, questioning the legitimacy and transparency of the proposed funding. Volk ruled that the Justices failed to adequately prove the document contains information with independent economic value that necessitates total secrecy.

“Defendants will likely satisfy the reasonable secrecy requirement, given the confidential negotiations that preceded the term sheet and the efforts made to protect the document from public disclosure,” Volk wrote. “They have not, however, (at least presently) discharged their burden respecting the independent economic value requirement. The few justifications they muster do not withstand scrutiny.”

According to previous court filings, representatives of TRT Holdings and the Justice family attempted to negotiate a deal where TRT agreed to forgive the remaining loan debt in exchange for a 50% stake in the Greenbrier. But that deal fell through, with WSSH deciding to take the matter to federal court. TRT Holdings purchased the remaining loan debt from Carter Bank in March.

“(The Justice family) contend that competitors … could seek to exploit their knowledge of the term sheet in business dealings either with or in competition with Defendants – and presumably the financing partner,” Volk wrote. “Although it is minimally possible to conceive of a theoretical situation where that might occur, it seems vanishingly unlikely.

“For example, the magnitude of the debt at issue in this case and the now-seemingly bitter adversarial relationship between the TRT and Defendant entities would suggest a poisoned well for purposes of any future attempt by the TRT entities to lock arms with Defendants in a cooperative commercial venture,” Volk continued.

Volk granted the 60-day continuance in the case but also ordered attorneys for the Justice family to file on or before Wednesday the redacted loan terms sheet and must file that same day in requests for certain loan details to be viewed by Volk in private and not be publicly disclosed.