×

Judge stays effort to seize Justice-owned helicopter

(Capitol Notes - Graphic Illustration/MetroCreative)

CHARLESTON — The effort to seize a helicopter owned by a company owned by Gov. Jim Justice is on pause while the courts determine its status.

Senior U.S. District Judge James P. Jones issued a stay Thursday of a writ filed Oct. 5 in the U.S. District Court for the Western District of Virginia Abingdon Division that ordered U.S. Marshals to seize a 2009 Bell Textron Canada Model 427 helicopter owned by Justice-owned Bluestone Resources.

Jones also ordered the parties in the case to not transfer any interests in the helicopter or conceal its location until the court rules on motions to determine the status of the asset.

The stay comes as a British Virgin Islands holding company seeking the helicopter as payment towards a court-ordered award is fighting with attorneys for Justice and a bank that claims the helicopter is collateral on loans to Bluestone.

The writ was sought last month by Caroleng Investments Ltd., the parent company of Russian mining and steel company Mechel. The U.S. District Court for the District of Delaware issued a judgment in 2021 in favor of Caroleng Investments for $10.1 million including pre-award interest. The court also set a 9% interest rate retroactive to May 13, 2020, as long as the amount remains unpaid.

Last week’s writ ordered the marshals to seize the helicopter, all logs, records, accessories, parts and other materials within 90 days of the writ. The writ also authorizes marshals to enter secured spaces by force if necessary to seize the helicopter. But the same day the writ was issued, the helicopter was flown from Roanoke to Burlington, N.C. to avoid seizure, followed by a motion from Bluestone attorneys seeking the stay.

On Wednesday, attorneys for Indiana-based 1st Source Bank joined Bluestone’s motion for a stay. According to the filing, 1st Source Bank and Bluestone entered into a loan and security agreement in 2018 for a $1.6 million loan. As part of the conditions of the loan, Bluestone granted the bank a lien on certain personal property that could serve as collateral on the loan.

After making additional loans to Bluestone and entering into various loan restructuring agreements between 2018 and 2022, Bluestone and 1st Source entered into an aircraft security agreement on a different helicopter, a 2012 Bell Textron Canada Model 427 helicopter with tail number N30GM.

According to court documents, the helicopter is worth $1.2 million, but the helicopter is collateral on a $5 million lien by 1st Source Bank.

“1st Source wishes to maintain the status quo with its lending relationship to (Bluestone) and it believes that the execution of the Writ and allowance of a forced sale of the Helicopter would impair 1st Source’s property interest in the Helicopter,” wrote 1st Source attorney Michael Hastings.

Justice sold his coal mining interests in Bluestone Resources to Mechel in 2009 for $578 million in cash and stock. Justice bought Bluestone Resources in 2015 for $5 million. Justice agreed to pay Caroleng Investments royalty payments as part of the deal to buy back the coal company from Mechel based on a per-ton of coal sold as well as a certain percentage of any future sales.

Caroleng Investments filed suit against Justice after his companies started withholding the royalty payments. Bluestone attorneys argued that the royalty payments were withheld because Caroleng was overpaid. Caroleng argued that its deal with Bluestone prohibited the company from holding back royalty payments.

Justice, wrapping up his second term as governor, is a Republican candidate for U.S. Senate in 2024. Bluestone is one of 147 assets owned by Justice according to his U.S. Senate financial disclosure report. Justice has turned over day-to-day management of his businesses to his son Jay and daughter Jill despite personally guaranteeing hundreds of millions in loans to his business while in office.

Steven Allen Adams can be reached at sadams@newsandsentinel.com.

Starting at $3.70/week.

Subscribe Today