DANVILLE, Va. – A confidential settlement has been reached to end a $1 billion lawsuit between a host of companies owned by Gov. Jim Justice, and those companies’ veteran creditor, the Martinsville-based Carter Bank & Trust.
The suit, which originated in the U.S. District Court for the Southern District of West Virginia before being transferred to the U.S. District Court for the Western District of Virginia in April, counted Justice, 14 companies he has a stake in and his immediate family members (who operate the companies while he holds gubernatorial office) as plaintiffs.
Carter Bank & Trust had been seeking to collect about $300 million in defaulted loan debts from the Justice-owned companies, which responded with litigation in state and federal court, including the instant $1 billion suit.
The debts, which were tied to multiple businesses within the Justice Family’s control, such as Greenbrier Hotel Corporation, were held by Gov. Justice, his wife Cathy and their son Jay, who oversees the Justice-owned coal businesses.
Other businesses involved in the litigation included Twin Fir Estates, Wilcox Industries, Justice Low Seam Mining, Players Club, Greenbrier Sporting Club, Oakhurst Club, Tams Management and Bellwood Corporation, among others.
Gov. Justice had argued that after a long-standing good relationship with Carter Bank & Trust, a sudden change in its lending philosophy made their business alliance untenable.
Earlier in 2024, Carter Bank & Trust made public its intention to sell the Greenbrier Sporting Club to help satisfy the debts in question, leading Gov. Justice to file suit in Greenbrier County in order to stop the sale from happening. Though proceedings in that state court litigation have slowed, perhaps due to the settlement reached in this federal court case.
Jay Justice offered the following statement in response to the settlement being reached:
“Our family has valued our decades-long relationship with Carter Bank dating back to my dad’s long-standing personal relationship with Worth Carter, the bank’s visionary founder and longtime chairman. Our family is committed to satisfying our outstanding obligations to Carter Bank and fulfilling our commitments under the terms of the agreement reached with Carter Bank,” Justice said.
Carter Bank & Trust offered a statement of its own, which it registered with the federal Securities & Exchange Commission, on the settlement:
“Carter Bank has obtained a voluntary dismissal of the federal lawsuit ‘with prejudice.’ This means that the Justice Entities may not bring any future legal action in any court based on the facts alleged in the federal lawsuit. Moreover, in connection with the dismissal of the federal lawsuit, the Justice Entities have executed a release that waives any and all causes of action of any kind that they might claim to have against Carter Bank. Moreover, Carter Bank anticipates the dismissal in the near future, again with prejudice, of the lawsuit filed against Carter Bank in the Circuit Court of Greenbrier County, West Virginia on Feb. 7, 2024 (the “WV lawsuit”) by Greenbrier Sporting Club Development Co., Inc. and Greenbrier Sporting Club, Inc.,” the Bank’s statement read, in part.
“In connection with the dismissal of the federal lawsuit and the WV lawsuit, the Justice Entities have agreed upon a pathway of curtailment and payoff of the loans they have outstanding with Carter Bank. The Justice Entities have already started that process of curtailment such that as of the date of this statement, the aggregate nonperforming loan balance associated with the Justice Entities has been reduced from $301.9 million as of the end of the 1 quarter, 2024 to a balance of approximately $294.1 million as of June 20, 2024.”
“Carter Bank continues to believe that it is fully secured on all loans it has outstanding to and obligations from the Justice Entities. In connection with the dismissal of the federal lawsuit and the WV lawsuit and the execution of a waiver of claims, the Justice Entities have also further enhanced Carter Bank’s collateral position, including cross-collateralizations and cross-guarantees, and executed documents reaffirming the legality, validity and binding nature of all loan documents they have executed in favor of Carter Bank.”
Thus, Carter Bank disclosed that the Justice-owned companies have already paid down $7.8 million of the debt amount. All other terms of the settlement remain confidential, upon mutual agreement of the parties.
Gov. Justice is currently running for the U.S. Senate in West Virginia.
U.S. District Court for the Western District of Virginia case 4:24-cv-00020
From the West Virginia Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com
