George S. May Business Blog

Greenbrier resort files for bankruptcy

Considered at one time as one of the US’ top hotels, Greenbrier resort has filed Chapter 11 bankruptcy. The owner announced future plans to sell the hotel to a division of Marriot International Inc.

The filing for Greenbrier Hotel Corp went under its parent CSX Corp who announced that it will sell Greenbrier’s White Sulfur Springs in West Virginia. The sale will be dependent upon Marriot receiving concessions from unions as well as them getting a $50 million loan from CSX. The Marriott unit would pay up to $130 million to the Greenbrier Hotel Corp within approximately seven years, depending on its performance. Of course, the Greenbrier deal will also rely upon approval from bankruptcy court.

Greenbrier Hotel Corp admitted in their filing that they maintained up to $500 million in debts and only $100 million in assets.

Greenbrier can’t fully be blamed for their inability to weather the storm of the recession as all travel and resort businesses have taken a major beating over the last year. In fact, they have taken many measures to prevent bankruptcy including writing down the value of the 721-room Greenbrier resort by $166 million last year.

However, even with all of their cost cutting measures the resort still lost nearly $9 million in the first two months of the year on $3.7 million in revenues, according to court documents.

This is a bigger deal than many may think, simply because of Greenbrier’s track record: CSX’s ownership of Greenbrier resort dates to 1910.

Another reason, not mentioned in many reports, for their downfall could be attributed to the loss of their 5 star rating from Mobil Travel Guide, back in 2000. The Greenbrier resort, which boasted prior to the rating drop its long list of presidential patrons (26 to be exact) reportedly, has spent millions of dollars since then trying to expand its offerings and attract younger visitors.

Although Marriot’s inclusion in the deal will likely help to keep Greenbrier afloat, one can only wonder if they will try to maintain the elite atmosphere as they move forward.

The case is in Re: Greenbrier Hotel Corp, U.S. Bankruptcy Court, Eastern District of Virginia, No. 09-31703.

Related posts:

1. Mesa Air files for bankruptcy For those unaware, Mesa Air Group filed for Chapter 11 Tuesday in a New York federal bankruptcy court. Mesa chairman and chief executive officer Jonathan...