How the Greenbrier deal went down

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Friday, March 18, 2011; 5:39 PM

Regarding the March 6 profile of Jim Justice, who "bought the Greenbrier in dramatic fashion in May of 2009 - snatching it out bankruptcy, outfoxing the executives of the Marriott Corp. . . .":

As the Marriott executive who was reportedly outfoxed, I greatly enjoyed your profile. But he did not outfox us, he simply outbid us. Marriott's contract to buy the Greenbrier from CSX was publicly filed with the court, and all comers were free to make a higher bid. As you noted, our agreement with CSX was that it would pay Marriott $50 million to take over the property subject to receiving from us payments in the future. Justice came along and offered CSX about $20 million in cash. He saw something in the Greenbrier that made it worth more to him than money, and he was in the enviable position of being able to act on it.

What is equally interesting is what happened next. Justice didn't want to go through bankruptcy court. He wanted control of the asset immediately. The day before we were due to file with the court, I met him for the first time at an airport hangar. I explained that it was not Marriott's desire to own the Greenbrier for the long term; our business is to get great hotels owned by third parties into our system for our customers to enjoy and for us to manage or franchise for a fee. We would work with Justice's company for 30 days to try to reach an agreement. If we couldn't make a deal, he would pay us $7.5 million. It soon became apparent that we were not going to reach an agreement.

Justice wanted to do things his way. He wired us $7.5 million and thanked us for the way we did business, saying I would have a "friend for life" in Jim Justice. Marriott, and especially those of us who met him, wish Jim and the Greenbrier team nothing but the best (and since we never give up, we still hope to work with them someday when the time is right!)

Rick Hoffman, Bethesda

The writer is executive vice president for mergers, acquisitions and business development for Marriott International.


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