Justice sues another bank, on hook for another $368M
CHARLESTON — After news broke about a $700 million personal guarantee by Gov. Jim Justice for a loan from a now-bankrupt lender, Justice is suing another bank where he is on the hook for another $368 million — more than $1 billion in debt combined.
According to court filings, Gov. Jim Justice, his wife Cathy Justice and multiple companies owned by the Justice family filed a civil case Monday in the U.S. District Court for the Southern District of West Virginia against executives of Carter Bank and Trust, a community bank headquartered in Bassett, Va.
Justice is seeking damages of $421 million from the bank, which the governor alleges engaged in anti-competitive behavior, breach of contract, and breach of its fiduciary duties.
The lawsuit alleges that several of Justice’s companies were tricked into missing loan payments, putting those loans into default and used to force the companies into new loan terms. Justice also alleges that Carter Bank is fighting an effort by Justice to refinance the loans through a new financial institution to keep from receiving reduced interest rates.
The Justice companies, including the Greenbrier Resort, want a judge to also rule any loan modifications made after 2017 as unenforceable. Justice’s companies have approximately $368 million of outstanding loans with Carter Bank, all guaranteed by Justice himself, his wife and his son Jay, who manages Justice’s coal and agricultural businesses.
Speaking by phone Tuesday, Justice said he had a wonderful relationship with Worth Carter, the founder of Carter Bank. When Carter died in 2017, Justice said the relationship with the bank changed.
“Carter and I were great personal friends. We developed that friendship over the 15 years,” Justice said. “Since that time, Carter Bank has had a lot of issues. Over the last probably three weeks, we have tried to pay off the Greenbrier loans and they basically have just stonewalled us. With all the trouble that bank is having, we just don’t seem to even go any further and that’s why we entered the lawsuit.”
This lawsuit comes on the heels of news first reported by the Wall Street Journal and confirmed by the governor Tuesday that he personally guaranteed as much as $700 million for supply-chain finance funds for one of his companies through the new-defunct Greensill Capital.
Credit Suisse Group, one of Greensill’s financiers, is seeking repayment of the loans from Greensill’s clients, including Justice’s Bluestone Resources Inc. Justice’s combined Greensill and Carter Bank loan debts comes to more than $1 billion, more than Justice’s $450 million net worth as estimated by Forbes magazine.
Justice filed suit against Greensill on March 15 shortly after the creditor went under. Justice accused Greensill of running “a high-class ponzi scheme.”
“We’ve become terrible victims, because here we are in the middle of a project and 48 hours later your banker declares bankruptcy and we find out they’re bad actors. We’re innocent as the driven snow, but here we are holding the bag.”
Justice said that he doesn’t expect he’ll have to pay back the full $700 million and that his companies’ assets are “rock solid.”
“This debt is backed by rock-solid assets,” Justice said. “We do not believe our personal guarantee will be affected in any way … however, in addition to that, we believe adamantly that we’ve been wronged and therefore that’s why we entered into a lawsuit with Greensill. We do not feel exposure at all.”
“From the standpoint of the Greenbrier or from the standpoint of Bluestone, they’re very healthy and they’re very profitable,” Justice said. “They’re moving right ahead and that’s what we’re going to do.”
A request for comment from Carter Bank was not returned.
Steven Allen Adams can be reached firstname.lastname@example.org.