Greenbrier Resort Owner Files for Bankruptcy; Selling Hotel to Marriott

March 20, 2009

The owner of the luxury Greenbrier resort filed for bankruptcy and plans to sell what was once one of America’s highest-rated hotels to a unit of Marriott International Inc.

Greenbrier Hotel Corp., a unit of the transportation company CSX Corp., filed for protection from creditors and also said it plans to sell its White Sulphur Springs, West Virginia, resort to Marriott Hotel Services Inc. The sale is contingent on Marriott winning concessions from unions and getting $50 million of financing from a unit of CSX.

The Marriott unit would pay up to $130 million to the Greenbrier Hotel Corp within approximately seven years, depending on its performance.

The deal must be approved by the bankruptcy court.

The Greenbrier Hotel Corp said in a filing with the bankruptcy court that it had up to $500 million in debts and up to $100 million in assets.

Travel and resort businesses have been hard hit by the recession, which has curtailed consumer spending on luxuries. CSX wrote down the value of the 721-room Greenbrier resort by $166 million last year, citing a weakening economy and high labor costs, according to CSX’s annual report.

The resort lost nearly $9 million in the first two months of the year on $3.7 million in revenues, according to court documents.

CSX’s ownership of the resort dates to 1910. The Greenbrier, which boasts that it hosted 26 presidents, lost its five-star rating from Mobil Travel Guide in 2000 and has spent millions of dollars since then trying to expand its offerings and to attract younger visitors.

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

(Editing by Tim Dobbyn)

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