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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001010549-01-000017.txt : 20010129
<SEC-HEADER>0001010549-01-000017.hdr.sgml : 20010129
ACCESSION NUMBER:		0001010549-01-000017
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010111
ITEM INFORMATION:		
FILED AS OF DATE:		20010126

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GREENBRIAR CORP
		CENTRAL INDEX KEY:			0000105744
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-SKILLED NURSING CARE FACILITIES [8051]
		IRS NUMBER:				752399477
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		
		SEC FILE NUMBER:	000-08187
		FILM NUMBER:		1516143

	BUSINESS ADDRESS:	
		STREET 1:		4265 KELLWAY CIRCLE
		CITY:			ADDISON
		STATE:			TX
		ZIP:			75244
		BUSINESS PHONE:		2144078400

	MAIL ADDRESS:	
		STREET 1:		4265 KELLWAY CIRCLE
		CITY:			ADDISON
		STATE:			TX
		ZIP:			75244

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MEDICAL RESOURCE COMPANIES OF AMERICA
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	WESPAC INVESTORS TRUST
		DATE OF NAME CHANGE:	19900605
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>0001.txt
<TEXT>


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                            ------------------------



                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                            ------------------------



       Date of Report (Date of earliest event reported): January 11, 2001



                             Greenbriar Corporation
                       -----------------------------------
             (Exact name of registrant as specified in its charter)



         Nevada                      0-8187                    75-2399477
- ------------------------   ------------------------    -------------------------
(State of incorporation)     (Commission File No.)        (IRS Employer
                                                           Identification No.)

                    4265 Kellway Circle, Addison, Texas 75244
           ----------------------------------------------------------
           (Address of principal execute offices, including zip code)



                                 (972) 407-8400
              ----------------------------------------------------
              (Registrant's telephone number, including area code)



                                        1

<PAGE>

Item 5.  Other Events.
- -------  -------------

         Registrant received a notice dated October 30, 2000, from the holder of
the outstanding shares of Series F Senior Convertible Preferred Stock and Series
G Senior  Convertible  Preferred Stock advising that such holder was electing to
convert the outstanding shares of preferred stock into common stock. Such notice
sets forth the holder's  position  that, as a result of certain  employee  stock
options issued by the  Registrant,  the conversion  price of the Preferred Stock
had  been  reduced  from  $17.50  per  share to $0.69  per  share,  and that the
Registrant must issue 27,502,855 shares of common stock upon conversion. If such
shares were issued, they would constitute 79.7% of the Registrant's common stock
and represent a change in the control of the Registrant. The Registrant would be
forced to obtain  stockholder  approval of the issuance of such a large block of
common  stock or face a  delisting  of its common  stock on the  American  Stock
Exchange. In the event such conversion occurred, the Registrant's  obligation to
pay the holder the  "make-whole"  distribution  that is due upon a conversion or
redemption of preferred stock would be reduced from approximately $27,000,000 to
approximately $7,600,000.

         The  Registrant  believes  that the  conversion  price was not properly
subject to adjustment, and, if the holder were to have converted, it would be at
the $17.50  conversion  price stated in the terms of the  preferred  stock.  The
Registrant's position is based, in part, upon the holder's failure to follow all
procedures  for  adjustment  and  conversion at the adjusted  price,  and on the
Registrant's  rescission  of the employee  stock options that were the basis for
the  holder's  purported  adjustment.  The holder filed a  declaratory  judgment
action in the State  District  Court in Dallas  County,  Texas seeking a finding
that it is entitled to a $0.69  conversion  price. The Registrant filed specific
denials and affirmative  defenses and  counterclaims  in defense of such action,
seeking, among other things, a contrary ruling that the conversion price was not
adjusted.

         On December 11, 2000,  the holder filed a Demand for  Arbitration  with
the  American   Arbitration   Association  seeking  to  move  the  dispute  into
arbitration.  Registrant  filed a Motion  to Stay  Arbitration  with  the  State
District  Court in which the lawsuit is pending on the basis that the dispute is
not subject to mandatory  arbitration,  or, in the alternative,  that the holder
waived any right to  arbitration.  A ruling has not been made on the arbitration
issue.

         On January 11, 2001, the preferred  stockholder filed an application in
the lawsuit filed in October, to obtain a temporary restraining order to prevent
Registrant  from converting the preferred stock into common stock at the rate of
$17.50 per share  pursuant to the mandatory  conversion  clause of the preferred
stock, appointing any new board members or from engaging in any transactions not
in the ordinary course of business. The court denied the injunction on the basis
that  plaintiff  had  adequate  legal  remedies  and had  failed  to  show  that
Registrant  was  threatening  to take any immediate  actions to the detriment of
plaintiff.

         On January 13, 2001,  Registrant  took the action mandated by the terms
of the  Series F and G  Convertible  Preferred  Stock to  convert  the shares of
Series F and G Convertible  Preferred Stock remaining outstanding into 1,054,202
shares of common  stock and  acknowledged  its  obligation  to pay the  holder a
$27,166,714   "make-whole"   amount  as  funds  for  repayment  become  lawfully
available.

         On January 15, 2001,  Registrant  received a notice  dated  January 12,
2001from the former holder of the preferred  stock to the effect that Registrant
was in default of the Preferred Stock Purchase  Agreement for failing to provide
a quarterly compliance certificate,  failing to meet various financial covenants
and failing to notify the holder of such  defaults.  The  preferred  stockholder
contends that these alleged breaches of covenants  triggered  penalty  dividends
under the terms of the preferred  stock,  and that  Registrant's  failure to pay
those penalty dividends entitles the preferred stockholder to appoint 70 percent
of  the  Board  of  Directors.   Registrant   disputes  all  such  defaults  and
alternatively  claims that such defaults have been waived,  reformed or that the
holder is estopped from asserting  them.  Registrant  further  disputes that any
penalty dividends were due under the terms of the preferred stock. Resolution of
the default  issues will become part of the ongoing  litigation  over all issues
relating to the preferred stock.

                                        2

<PAGE>

                                   SIGNATURES
                                   ----------

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.


January 23, 2001


                                   GREENBRIAR CORPORATION



                                   By:    /s/ Gene S. Bertcher
                                      ------------------------------------------
                                      Gene S. Bertcher, Executive Vice President













                                        3

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