LEWISBURG – Attorneys for businesses owned by Gov. Jim Justice and his family are asking for a preliminary injunction to temporarily stop an auction on the courthouse steps to sell the Greenbrier Sporting Club.
The legal team for the Greenbrier Sporting Club Development Co. filed the motion February 14 in Greenbrier Circuit Court. It comes a week after they filed a complaint seeking an injunction to block the auction, which is scheduled for March 5 on the steps of the Greenbrier County Courthouse.
The sporting club is a group of private residences near the resort, which was purchased by Justice in 2009.
In the latest filing, Justice’s attorneys asks Circuit Judge Jennifer P. Dent to enjoin the auction planned by Virginia-based Carter Bank & Trust, which says the Justice-owned companies owe more than $300 million after defaulting on loans personally guaranteed by the governor, his wife Cathy and son Jay, who oversee the family’s coal businesses.
“The Trust Deed — which was prepared and recorded by Carter Bank — falsely states the maximum amount of the debts it secures, in violation of West Virginia law,” the filing states, also noting the deed is valid only up to $250 million. “And the underlying debt itself is the subject of intense dispute: Plaintiffs have sued Carter Bank over breaches of contract and fiduciary duty that would excuse any further performance by Plaintiff — including the surrender or sale of collateral — and for damages of at least $1 billion, which would more than offset any amount owed to the bank.
“The bank now seeks to sell off plaintiffs’ property before that dispute is resolved. The attempted sale is nothing more than a race to strip plaintiffs of their assets (in a hastily scheduled auction on the courthouse steps that likely would bring pennies on the dollar) before their claims against the bank can be adjudicated. The court should enjoin it.”
The Justice companies say the auction shouldn’t occur until the federal lawsuit is resolved, and they say the auction would damage the overall value of the sporting club.
“The Shared Facilities are the principal amenities available to Sporting Club members, and if they become unavailable as the result of a sale, the value of members’ residences would plummet immediately,” the motion states. “The Greenbrier and its affiliated entities, including The Greenbrier Sporting Club, are the lifeblood of Greenbrier County’s economy, directly employing nearly 2,000 people and indirectly supporting hundreds or thousands of additional jobs.”
“The proposed sale directly jeopardizes the jobs of nearly 200 employees who work at the properties defendants seek to sell and would harm the broader business of The Greenbrier as a whole.”
In the original filing last week, Justice’s attorneys say the auction would be damaging to the companies as well as Greenbrier County in general.
“Plaintiffs’ operations are a significant contributor to the local economy, and plaintiffs are closely intertwined with The Greenbrier resort, which is Greenbrier County’s largest employer,” the February 7 complaint states. “The proposed sale will severely damage not only Plaintiffs but also The Greenbrier, jeopardizing thousands of local jobs,” according to the filing.
Carter Bank placed a legal notice of auction the private club to satisfy a $302 million debt 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.
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 a Virginia judge 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, Martinsville (Va.) Circuit 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.”
The Justice companies are being represented by Steven Ruby, Michael W. Carey, Raymond S. Franks II and David R. Pogue of Carey Douglas Kessler & Ruby in Charleston.
Greenbrier Circuit Court case number 24-C-17
