Delta Lawsuit Says Greenbrier Resort Must Pay Minimum for Flying in Guests

Delta Air Lines Inc. (DAL) sued the Greenbrier luxury resort accusing it of failing to pay the airline a guaranteed minimum to fly visitors to a nearby airport.

Greenbrier had the case moved to federal court Jan. 18 after Delta sued on Dec. 19 in Fulton County Superior Court in Atlanta, where the airline is based. Delta is asking for $4 million and said in its complaint that it will draw on a $1 million letter of credit until the resort meets its obligations.

The Greenbrier guaranteed Delta a minimum payment to fly guests from Atlanta and New York to the national landmark golf resort in the mountains of West Virginia, according to the complaint. Delta said its revenue from the service was less than what Greenbrier guaranteed under the contract.

“The parties recognize that there is an inherent risk that the bookings on scheduled service may not be sufficient to generate the minimum revenues required to avoid the payment of the revenue guarantees,” Delta said. The resort was “willing to assume that risk in order to induce Delta to enter into this agreement,” according to the airline.

Barry Hunter, an attorney for the Greenbrier, had no immediate comment on the lawsuit.

The case is Delta Air Lines Inc. v. Justice Family Group LLC, 12-cv-00173, U.S. District Court, Northern District of Georgia (Atlanta).

To contact the reporters on this story: Laurence Viele Davidson in Atlanta at lviele@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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