MARTINSVILLE, Virginia – A Virginia-based bank has filed 10 more confessed judgments against companies owned by West Virginia Gov. Jim Justice.
Attorney Scott C. Wall filed the judgments May 15 in the Circuit Court of the City of Martinsville on behalf of longtime Justice banker Carter Bank & Trust to collect from the Justice-owned companies.
In April, the bank filed 11 confessed judgments against Gov. Justice, his wife Cathy and their son Jay individually for more than $300 million in principal owed on loans for the companies because they had signed personal guaranties on the loans. The latest batch of filings are filed against the actual companies rather than the individuals. The loans came due April 15.
The companies listed in the judgments are Bellwood Corporation, Justice Low Seam Mining, Tams Management, Oakhurst Club, James C. Justice Companies, Twin Fir Estates, Wilcox Industries, Greenbrier Medical Institute, Tams Management, Greenbrier Hotel Corporation, Players Club, Justice Family Group, Greenbrier Golf & Tennis Club, Greenbrier Sporting Club Development Company and Greenbrier Sporting Club.
The judgments claim the individuals and the companies owe a total of more than $301.4 million in principal plus interests, late fees and attorney fees. Confessions of judgment are signed agreements that can be presented to the court without notifying the debtor.
Earlier in the week, an attorney for the Justice Family Companies filed 11 motions in the same court to set aside the previous confessed judgments filed April 29 by Carter Bank against the individuals who signed personal guaranties.
In those May 15 motions filed by attorney Aaron B. Houchens for the Justices, the family members ask Judge G. Carter Greer to set aside the confessed judgments and to have the matters heard at trial.
“Defendants respectfully request that the confessed judgment be set aside and this matter be placed on the trial docket schedule,” the motions state. “As defendants will further explain in their memorandum of law, they have numerous defenses which are not only adequate but dispositive defenses to an action at law on plaintiff’s notes and guaranties.”
Houchens writes that Carter Bank has violated the federal Bank Holding Company Act of 1956 in connection with its lending relationship with the Justice family and their businesses. He also says the act of obtaining the confessed judgments are part of a scheme to violate that act, so the confessed judgments must be set aside.
He also writes that Carter Bank has breached its contractual obligations and fiduciary duties to the defendants and their businesses and has tortiously interfered with the businesses and their relationships with other lenders. He also says the confessed judgments violate due process and are unenforceable.
Houchens also writes that the personal guaranties that underlie the confessed judgments have been voiced and rendered unenforceable by Carter Bank’s statutory, contract and fiduciary violations as well as its tortious conduct.
Virginia is one of a few states that allow for confessions of judgment, and Houchens says it provides “strong protections to assure due process and equity.”
“Virginia recognizes the due process and equity concerns implicated by confessions of judgment by requiring courts to set aside a confessed judgment where a defendant asserts an adequate defense or setoff in an action at law,” Houchens writes. “Defendants hereby assert defenses that are more than adequate to defeat any action at law by plaintiff.
“Defendants therefore must, as a matter of state law and due process, be afforded an opportunity to establish those defenses in the ordinary course, by having this matter placed on the trial docket.”
After Carter Bank initially filed the first batch of personal confessed judgments, Jay Justice issued a press release April 21 about the “significant lending dispute” with the bank, accusing it of “predatory behavior” and “obstructive conduct.”
That press release spurred the bank to seek the injunction against Jay Justice to stop talking about the court cases, and Greer granted that May 1
“The Justice companies have been unable to reach agreement with the bank despite having secured a refinancing opportunity that would pay Carter Bank $250 million in immediate cash and provide a path to completely pay off the companies’ Carter Bank loans within months,” Jay Justice said in the press release, adding that the bank has blocked efforts to repay the loans “to continue extracting interest payments from the Justices.”
He also said the bank’s new filing “is nothing more than an illegal attempt to stop us from working with other lenders. It is unimaginable that a bank would deny a customer the ability to pay off a loan.”
Carter filed the complaint and motion for preliminary injunction against Jay Justice on April 26 to prevent him “from disclosing further confidential information about the credit relationships and ongoing business negotiations between Carter Bank and certain entities owned and controlled by defendant and his family members.”
The bank says the information is protected under a confidentiality and nondisclosure agreement “specifically designed to prevent, among other things, the sort of inflammatory and prejudicial statements” Jay Justice made in the press release.
On April 27, Jim Justice announced plans to run for U.S. Senate for incumbent Democrat Joe Manchin’s seat. Justice will face off against Congressman Alex Mooney in the Republican primary.
Earlier this year, the governor said his company is looking into selling all or part of its coal assets to resolve debt issues with Credit Suisse. The governor also is having his wages garnished by an Elkins-based bank to finish paying an $850,000 judgment from a civil lawsuit. He has called that move political grandstanding and said his company will pay the debt.
In April, a three-judge panel of the 4th U.S. Circuit Court of Appeals affirmed $2.6 million in penalties against coal mine owned by the Justice family over claims they violated a 2016 settlement that was supposed to prevent pollution. Southern Coal Corp. and Premium Coal Co. had appealed a lower court ruling. The mines are located in Alabama, Kentucky, Tennessee, Virginia and West Virginia.
City of Martinsville Circuit Court case number CL23000148-00 through CL23000156-00 and CL23000158-00