- The Washington Times - Thursday, March 19, 2009

CHARLESTON, W.VA. (AP) - The posh Greenbrier resort, which has gone from hosting presidents and royalty to posting losses, filed for Chapter 11 bankruptcy protection Thursday 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.

CSX, meanwhile, would be ridding itself of a money losing property that is struggling to fill its 720 rooms amid anemic consumer spending.

The Greenbrier lost $35 million last year and the bankruptcy filing shows the flow of red ink is speeding up. Monthly revenue plummeted approximately 63 percent 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.

The Greenbrier said the deal hinges on negotiating a new labor deal, as well as approval by the bankruptcy court, which is expected to allow other potential buyers to make bids.

(This version CORRECTS transaction details.)



Click to Read More

Click to Hide