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Gov. Jim Justice’s companies continue to be plagued by debt collectors and lawsuits as he prepares for a run for U.S. Senate. (Photo courtesy of the WV Governor’s Office)
CHARLESTON — Once West Virginia’s only billionaire, Gov. Jim Justice is heading into his U.S. Senate race with less personal wealth and more financial headaches.
Justice announced his U.S. Senate candidacy Thursday night at his Greenbrier Resort in White Sulphur Springs to a packed ballroom of family, friends, state officials, lawmakers, lobbyists, and supporters. He will likely need their financial support as well to get through the Republican primary and general election in 2024.
“I ask you to run right with me and absolutely run as we have so many times, run through the finish line together, pull the rope together. We’ll do it,” Justice said.
IN THE RED
Justice entered the Forbes 400 billionaires list after 2009, at one point jumping to $1.7 billion in worth. But after 2021, Forbes lowered Justice’s worth at $440 million following the issues with the now-defunct financial firm Greensill Capital.
Jim and First Lady Cathy Justice personally guaranteed loans for Bluestone Resources — one of the 111 companies owned by Justice according to his 2023 financial disclosure report to the West Virginia Ethics Commission — to Greensill for approximately $700 million combined beginning in 2018 for Bluestone Resources. The total loan debt was more than $850 million.
Greensill filed for bankruptcy in 2021 after losing coverage by credit insurers meant to provide the company liability protection from risky supply-chain finance funds, a kind of payday loan meant for companies. Shortly after Greensill filed bankruptcy, Swiss-based Credit Suisse Group froze all the funds and was working with Bluestone and other borrowers to return the borrowed money.
Bluestone made an offer with Credit Suisse last year to settle past loans to Greensill. Bluestone offered Credit Suisse $300 million by refinancing the existing loans through a third-party lender. The company also offered Credit Suisse half of any proceeds from the future sale or initial public offering of Bluestone.
According to a March article in the Wall Street Journal, the Justice family retained a firm to advise them on the best way to sell Bluestone or parts of Bluestone’s assets and retire the company’s debt load. Justice has since denied that the effort to retire Bluestone’s debt is because of his Senate campaign.
“I have personally guaranteed notes for our businesses as far back as far back can be,” Justice said. “This doesn’t have anything to do with anything but that.”
Also in March, Citizens Bank of West Virginia filed an application for suggestee execution with the Randolph County Circuit Court seeking a garnishment of Justice’s salary and wages as governor after the bank was awarded a judgment against Justice-owned Bluestone Resources Inc. last year of $861,085, which includes unpaid interest and costs.
The bank is seeking a 20% garnishment of Justice’s salary as governor after state and federal taxes or the total amount of Justice’s wages after deductions each week that exceed the federal minimum hourly wage, whichever is less.
The garnishment would be for one year from the time the court grants the garnishment. Justice has personally guaranteed more than $3 million in loans from the bank to purchase heavy machinery, with some equipment already returned to the bank.
Justice’s companies also continue to tangle with Virginia-based Carter Bank and Trust. The bank filed claims last week seeking more than $300 million nearly two years after the Justice dropped a federal lawsuit against the bank. Carter Bank filed 11 individual cases – called confessions of judgment – against Jim and Cathy Justice in an attempt to collection $302 million plus interest and attorney fees.
In a late-night press release last Friday, Jay Justice – son of Gov. Justice who manages the Justice family’s coal and agricultural businesses – said they tried to reach an agreement with Carter Bank officials, offering them $250 million up front, leaving them with four outstanding loans totaling $57 million secured with $325 million in collateral.
“Our companies’ refinancing plan would immediately pay off several of our loans with Carter Bank and set the stage to quickly eliminate all the remaining loans,” Jay Justice said, “But the bank has blocked those efforts, instead seeking to stop us from refinancing our loans with other lenders … Unfortunately, the bank’s predatory behavior will now obligate us to aggressively protect our legal interests.”
Justice’s companies dropped a federal lawsuit against Carter Bank in 2021, with Carter Bank dropping a circuit court lawsuit against Justice’s companies over $368 million in loans that were also personally guaranteed by Justice.
UNHAPPY NEIGHBORS
Another Justice-owned entity – Justice Holdings LLC – was before the West Virginia Supreme Court of Appeals Tuesday over the issue of assessments involving a homeowners association connected to Justice’s Glade Springs Resort. Justice Holdings was appealing a decision in Raleigh County Circuit Court last year in favor of the Glade Springs Village homeowner’s association for $6.6 million in due assessments.
Justice Holding took over Glade Springs Valley in 2010 from Arkansas-based Cooper Land Development. But in 2019, property owners ousted the Justice-backed homeowners association. The homeowners believe that Justice Holdings is not paying its fair share to maintain the common properties at Glade Springs Valley, such as private roads, its water and sewer system. Attorneys for Justice argued that previous agreements made the developer exempt from the same assessments that individual property owners paid.
“It’s very clear that when you have agreements between parties, you enforce the intent of those agreements even when there’s a mistake, and you figure out what the intent is by what they wrote, what they intended, and the surrounding circumstances,” said Justice Holdings attorney Shawn George.
Justice Holdings, Glade Springs Resort, and Glade Springs Real Estate Co. are seven out of Justice’s 111 companies that were placed into a blind trust after Justice was elected governor in 2017. In the case of Justice Holdings, Jay Justice, daughter Jill Justice, and Justice company officials James Miller and Stephen Ball are in charge of that specific company.
While the Justice Holdings appeal is awaiting a decision by the state Supreme Court, Cooper Land Development is suing James C. Justice Companies Inc. in the U.S District Court for the Western District of Arkansas Fayetteville Division. Cooper Land Development is seeking a declaratory judgment against Justice’s companies.
Cooper Land Development alleges that Justice Holdings amended the terms of an interest free utility loan to require payment of the interest and unpaid balance of the loan. Justice then filed suit against Cooper Land Development to recoup the financial losses due to the West Virginia case against the property owner’s association. Justice’s companies sought to rescind the original purchasing agreement with Cooper Land Trust.
“The efforts of Justice Holdings to rescind the Purchase Agreement and the Subsidiary Agreements with CLD (Cooper Land Development) by and through the Justice Federal Case amount to failure of performance of the obligations therein by Justice Holdings …,” wrote CLD attorney Betsy Baker. “Upon the failure or refusal of Justice Companies to honor the Guaranty, CLD is entitled to recover all costs of enforcing its rights under the Guaranty from Justice Companies.”
SPARE A DIME?
These debts are just some of the various debts, penalties, and fines owed by companies owned by Jim Justice. With Justice’s reduced wealth and with creditors clamoring for his wallet, it could affect whether Justice is able to self-fund. According to Justice’s most recent campaign finance filing with the West Virginia Secretary of State’s Office, Justice still has more than $2.6 million in outstanding loans for his 2020 re-election campaign for governor.
Speaking earlier this week prior to his Senate announcement, Justice said he would not rely on self-funding.
“That person is not going to fund his campaign,” Justice said. “I would not advise doing that. This really needs to be an all-in approach. Everybody should be all in without any question … I really run off of other people’s energy, and to just sit back and do this on my own? I’m not going to do that at all.”
Steven Allen Adams can be reached at sadams@newsandsentinel.com
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