Case: Greenbrier

  • GreenbrierProperty: High-end, second home development deal near Greenbrier Resort (WV)
  • Scope: Overleveraged residential development started before the real estate downturn in 2006
  • Challenge:
    • Excess leverage incurred relative to prevailing market value (First and Second loan)
    • Eight original partners had jointly and severally guaranteed the debt – and only one was solvent
    • Very large potential tax liability looming with debt forgiveness
    • Existing lender under substantial duress
  • Solution:
    • Devised and executed a sophisticated structure addressing the tax and liability issues, and subsequent development needs
    • Purchased the note at a deep discount to face value, while deferring the tax liability 20 years
    • Purchased the note three weeks before the Feds took the bank over
    • Formed a Newco and raised fresh equity and debt to execute the development
    • Raised Section 108 HUD Financing to build worker housing product for Greenbrier Resort