NEW YORK — West Virginia Gov. Jim Justice is suing Greensill Captial alleging Bluestone Resources was deceived, which caused the company harm.
The plaintiffs in the case allege Greensill Capital, Lex Greensill and Roland Hartley-Urquhart breached their contract, breach their covenant of good faith and fair dealing, committed fraud, breached their fiduciary duties, aided and abetted breaches of fiduciary duties and committed civil conspiracy all in connection with an unlawful and intentional scheme against the plaintiffs, according to a complaint filed March 15 in U.S. District Court for the Southern District of New York.
Justice, his wife, Cathy Justice, son James Justice III, Bluestone Resources, Bluestone Coal Sales Corporation and Blackstone Energy alleged they began a business relationship with Greensill in May 2018 and the defendants perpetrated a continuous and profitable fraud on the plaintiffs.
"Over the course of that period, defendant Greensill Capital advanced $850 million to Bluestone, of which approximately $108 million was paid directly in cash back to Greensill Capital in the form of fees and Greensill Capital received at least another $100 million in prospect equity value through warrants," the complaint states. "Greensill Capital was only able to perpetrate its fraud on plaintiffs by inducing plaintiffs to believe that they had found a long-term financing partner to support plaintiffs’ efforts to rehabilitate and relaunch their newly acquired Bluestone business – a business that had been severely neglected and mismanaged under prior ownership."
The plaintiffs claim the defendants acknowledged and agreed that the enterprise financing was intended to be a long-term financing partnership and in so doing induced the plaintiffs to increase their exposure to and dependency on Greensill Capital, resulting in a greater and greater financial benefit to the defendants.
Justice and the defendants allege that they performed their obligations as required, but Greensill deceived the plaintiffs and committed fraud.
"Greensill Capital’s sudden and unjustified abandonment of Bluestone, together with all of the press surrounding Greensill Capital’s fall, now present a clear and present threat to Bluestone’s business," the complaint states. "Defendants are responsible for all damages to plaintiffs caused as a result of their egregious actions."
The plaintiffs are seeking compensatory and punitive damages. They are represented by James L. Bromley and Benjamin S. Beller of Sullivan & Cromwell.
U.S. District Court for the Southern District of New York case number: 1:21-cv-02253