CHARLESTON – Gov. Jim Justice and one of his attorneys say companies owned by his family have reached a settlement with a Virginia-based bank over nearly $400 million in loans.
Justice told MetroNews the settlement ends the dispute between his family businesses and Carter Bank & Trust, which is based in Martinsville, Virginia.
“It’s a real positive resolution,” Justice told MetroNews on August 31. “All defaults have been dropped.”
Ruby
In a statement issued by attorney Steve Ruby, the Justice companies said they had “successfully concluded a number of matters relating to Carter Bank and Trust.”
“CB&T will dismiss the legal actions that it filed against James C. Justice II and Cathy Justice in the Martinsville, Virginia, Circuit Court, and the Justice companies will dismiss their federal action against CB&T and its directors in the Southern District of West Virginia,” the statement said. “The resolution marks a resumption of the companies’ previous business relationship with CB&T and will allow them to maximize performance in the current favorable markets in mining, hospitality, and agriculture.”
Ruby told The West Virginia Record the dismissal orders for both cases will be filed soon.
“The Justice businesses are doing well, and that means they have money coming in to pay off the loans,” Ruby told The Record. “I think this is a good resolution. It’s good for the Justice companies and for the bank. It was the best decision for everyone involved to extend these loans.”
The statement also included comments from Jay Justice, president of the Justice mining and agriculture businesses, and Jillean Justice Long, president of The Greenbrier resort.
“We are pleased to move past our disagreements with CB&T, and we look forward to a continued productive relationship with the bank moving forward,” Jay Justice, the governor’s son, said. “This resolution clears the way for our businesses and our people to focus on what they do best: producing world-class coal and running world-class farms.
“Today’s strong coal and agriculture markets present an extraordinary opportunity, and we are now in an even better position to respond to it.”
“Our relationships with our business partners are important to us, and we welcome the resumption of our productive relationship with CB&T,” Justice Long said. “In a record-breaking year for The Greenbrier, today’s resolution helps ensure continued strength.”
Carter Bank has not issued a comment or statement about the settlement. As recently as August 27 and August 31, parties were filing responses in the federal lawsuit.
And the filings in Martinsville Circuit Court regarding the loans personally guaranteed by Jim and Cathy Justice still are listed as active.
The Justice companies sued Carter Bank on May 31, a day before the loans were due. The lawsuit alleged the bank refused to work with the companies to restructure or refinance loans. The bank, in turn, argued the lawsuit was nothing more than a stall tactic to avoid payment on the loans.
Justice’s companies are involved in other litigation, including a lawsuit they filed against Greensill Capital, another financial institution, claiming Justice wouldn't have personally guaranteed $700 million in loans if he were aware of the instability of the lender. Justice, his wife and son, Bluestone Resources, Bluestone Coal Sales Corporation and Blackstone Energy allege Greensill and other defendants were well aware of the risks of forcing the plaintiffs into engaging in a high yield debt refinancing.
"This bait and switch was indicative of Greensill Capital’s deceptive conduct during the period leading up to its collapse," that complaint states.
Greensill Capital later sold the $700 million in loans to investment funds managed by Credit Suisse Group. Credit Suisse Group says Bluestone Resources owes the money in which Justice and his wife personally guaranteed.
“We had the rug jerked out from us. Greensill is a Ponzi scheme and we're a victim,” Justice told WVVA Television. “We didn't even know Credit Suisse existed. But the outcome will be the same. We're working with the Credit Suisse people and everything is moving along. We expect a good outcome.
“All I can do is report that The Greenbrier is doing fabulous. The coal business is doing fabulous. The idea that the empire is in trouble and all this stuff … let's quit that nonsense."
Also, Caroleng Investments Limited, a parent company of Mechel Bluestone, says Justice’s Bluestone Resources Inc. owes $10 million, according to a petition filed in July in federal court in North Carolina. The judge ordered Justice to pay the money related to his repurchase of Mechel Bluestone in 2015.
Justice sold Bluestone to Mechel for $436 million in 2009, and he paid $5 million for it when he bought it back in 2015.
Caroleng says Justice paid $5 million in cash and was to pay $3 per ton in royalty payments for mined coal plus portions of future sale. Caroleng says Bluestone withheld the royalty payments. Bluestone claims it withheld “setoff” money for amounts it overpaid, but Caroleng says a clause kept Bluestone from keeping such “setoff” payments.
Last month, The Record report that Justice-owned companies owe nearly $300,000 in real estate taxes in Raleigh County.
The Record also reported that a company owned by Gov. Justice and his family owes almost $10 million related to a federal court judgment that was handed down almost two years ago.
Also, The Record reported that the Internal Revenue Service received some money from Justice’s daughter following the sale of her house on an $8 million federal tax lien filed against her earlier this year.
In July, The Record also reported that Justice-owned businesses owe nearly $100,000 in 2020 property taxes in McDowell County.
In March, the IRS filed a tax lien of more than $1 million against The Greenbrier Hotel Corp., which is owned and operated by Justice’s family. The IRS filed several liens against Justice businesses and even his daughter Jill Justice Long in March.
Also in March, a lien of $80,224.22 was filed against The Greenbrier Clinic for employment taxes as well. In addition to serving as president of The Greenbrier, Jill Justice Long is a physician at The Greenbrier Clinic.
Another 941 tax lien was filed against The Greenbrier on June 22 for $395,722.
Also in March, a lien of more than $8 million was filed against Jill Justice Long over personal income taxes dating back to 2009, which is the same year the Justices’ Bluestone Coal Corp. was sold to a Russian company and the same year the family purchased The Greenbrier out of bankruptcy.
Until this year, Justice was listed by Forbes as the state’s only billionaire. That designation changed because of his company’s financial troubles, most notably with Greensill. Justice’s businesses sued Greensill regarding loans taken in 2018. Greensill sold the loans to investment funds managed by Credit Suisse, which now seeks to recover the money from major borrowers, which includes Justice’s Bluestone Resources.
Carter Bank and the other defendants are being represented by Booth Goodwin and Carrie Goodwin Fenwick of Goodwin & Goodwin in Charleston, John Lynch, Laura Anne Kuykendall, Megan Elizabeth Burns and Robert Angle of Troutman Sanders in Roanoke and Virginia Beach.
Justice and the other plaintiffs are being represented by Steven Ruby and David Pogue of Carey Douglas Kessler & Ruby in Charleston, Benjamin Beller, Rodgin Cohen and James Bromley of Sullivan & Cromwell in New York and Christopher Schroeck of Bluestone Resources in Roanoke, Va.
Booth Goodwin ran against Justice in the 2016 Democratic primary for governor. Justice won that election and the general election in the fall before switching to the Republican Party in 2017.
U.S. District Court for the Southern District of West Virginia case number 5:21-cv-00320
