CHARLESTON – Businesses owned by Gov. Jim Justice and his family are facing a double whammy in courts.
First, a Virginia-based bank has placed notice to auction The Greenbrier Sporting Club to satisfy a debt signed by Justice and members of his family.
Second, a proposal filed in federal court would have Justice’s Bluestone Resources surrender a company helicopter for a court-ordered sale to help pay for a $13 million judgment against in from 2021 related to Bluestone’s failure to meet the terms of a coal production agreement.
In The Greenbrier Sporting Club matter, Carter Bank & Trust placed notice to auction the private club to satisfy a $302 million debt personally guaranteed by Justice, his wife Cathy and son Jay, who runs the family’s coal business.
A legal notice of the auction appeared in the February 6 edition of The Charleston Gazette-Mail. It mentions specific lots, including 48 lots as well as more than 370 acres of land. Some of the lots already could be developed. The legal notices say the auction is scheduled for March 5 at the Greenbrier County Courthouse in Lewisburg.
Last year, Carter Bank filed orders of confessed judgments adding up to $302 million in Martinsville (Virginia) Circuit Court. The claims cited the personal guarantees by the Justices. The confessed judgments are for loans Carter Bank made to James C. Justice Companies, Justice Family Group, Greenbrier Hotel Corp., Greenbrier Golf and Tennis Club, Greenbrier Sporting Club, Players Club LLC, Oakhurst Club, Greenbrier Medical Institute, Justice Low Seam Mining, Twin Fir Estates and Wilcox Industries.
Justice attorneys asked to have the confessed judgments set aside, claiming Carter Bank placed restrictions on the loans that were too rigid. They also accused the bank of unfair business practices.
But, Judge G. Carter Greer dismissed Justice’s requests last month saying the Justice companies had not presented enough of a factual defense to convince him to set aside more than $300 million in defaulted loans.
“The motions contain no allegation of any well-recognized defense in the realm of commercial paper, such as fraud, duress, mutual mistake of fact, statute of limitations or scrivener's error,” Greer wrote in a January 22 memo. “As the plaintiff (Carter Bank & Trust) points out, the defendants do ‘not allege that the confessed judgment claimed amounts that are incorrect or that were not due and owing.’
“Surely, if any such defense existed, the defendants would have alleged the facts to support it. The motions to set aside the confessions of judgment are denied.”
Also, a hearing is scheduled February 14 for Carter Bank to present for entry the order effectuating Greer's ruling to set aside the confessed judgments.
In the helicopter agreement, Caroleng Investments Ltd. and 1st Source Bank previously contested each other’s claims to the 2009 Bell helicopter. But, they filed the joint proposal February 2 to require Bluestone to surrender the copter to Texas-based broker Heli-X for sale.
Caroleng, which is based in the British Virgin Islands, has sought the helicopter after Bluestone failed to pay the $13 million 2021 judgment, but Indiana-based 1st Source had asked the court to stay the seizure order because it said selling the helicopter would damage its interest in it.
Last month, U.S. District Judge Robert Ballou of the Western District of Virginia denied Bluestone’s motion to stay a court order seeking to have federal marshals seize the helicopter, which is estimated to be worth about $1.2 million.
The February 2 joint order filed would allow Caroleng to proceed with the seizure of the helicopter and deliver it to Heli-X if Bluestone doesn’t do so. Sale proceeds would stay in escrow until liens and title transfer are finished.
