CHARLESTON, W.Va. — Gov. Jim Justice’s companies — and the governor himself — are being sued in federal court over default on a loan for the companies’ private helicopter.
About $4 million is remaining on the loan. The plaintiff wants to foreclose and take back the helicopter.
The lawsuit was filed last Tuesday in federal court in the Southern District of New York on behalf of the lender, Citizens Asset Finance. Justice’s lawyers had not yet responded by Monday afternoon.
Defendants include Justice Aviation LLC, James C. Justice II as the guarantor of the loan and James C.Justice Companies Inc. The lawsuit also lists the governor’s grown children, Jay Justice and Jill Justice, as members of the limited liability corporation that took out the loan.
Justice Aviation took out a loan on Dec. 30, 2009, for an AgustaWestland S.p.A. model A109S helicopter and two Pratt and Whitney Canada model PW207C helicopter engines.
Justice Aviation then leased the aircraft to James C. Justice Companies.
The full amount was $6.6 million.
James Justice II, who was elected governor of West Virginia last year, also signed a 2009 guaranty agreement on the loan.
“As set forth therein, the guaranty is absolute and unconditional, and guarantees all payment and performance obligations of the borrower under the loan agreement and the note,” wrote the lawyers for the lender.
Before the loan matured, Justice aviation and Jim Justice, as the guarantor, defaulted, the lender claims.
“Prior to the maturity of the note, the lender notified the borrower and the guarantor of these defaults under the loan documents, demanded that the borrower and guarantor cure all defaults and reminded the borrower and guarantor of lender’s rights and remedies under the loan documents,” the lawsuit states.
Earlier this year, Jan. 11, the lender and Justice’s businesses entered into a forbearance agreement, which is a special agreement to delay a foreclosure. That was five days before Justice’s inauguration as governor.
Under the agreement, “defendants acknowledged and admitted, among other things, the existence of the initial defaults and their liability to lender under the loan documents.”
At that point, the debt was no less than $4,283,631.73, the lawsuit claims.
The forbearance agreement expired on May 31. At that point, Justice was deep into separate “mediator-in-chief” negotiations with legislators in hopes of reaching an agreement on the state budget.
After the forbearance expired, the lender reminded Justice and his companies that the initial defaults continued to exist and that additional defaults had piled up in the meantime. The lender sent a letter on Sept. 6.
“Despite repeated demands, the borrower and guarantor have failed to pay the lender all the amounts due under the loan documents,” the lawsuit states. “In addition, the defendants continue to use the aircraft and have not made a payment to lender since April 2017.”
The lawyers for Citizens Asset Finance say the company is now due $4,290,297.33 plus other costs such as attorneys fees.
Because he’s the guarantor, Justice himself is being held responsible by the company.
Here’s how the lawsuit puts it:
“Wherefore, Plaintiff Citizens Asset Finance Inc. prays for judgment in its favor and against defendant James C. Justice II in the amount of not less than $4,290,297.33, in addition to all costs, charges, and expenses, including attorneys’ fees accrued (and accruing) through and after the dates set forth above, all other amounts due under the loan documents and such other and further relief as this court shall deem just and appropriate.”
The company wants to foreclose against Justice and his companies and take back possession of the aircraft.
This is the second federal lawsuit filed against James C. Justice Companies this month.
The other, unrelated lawsuit alleges a broken agreement over leased mineral rights in Kentucky.
In that case, Justice’s companies are accused of fraudulently transferring property to avoid responsibilities in a business deal that was the subject of a related lawsuit a few years ago. The lawsuit wants punitive damages of at least $16.9 million plus payment of a court judgment of $60 million from the original case.
The lawsuit names James C. Justice Companies, Justice Farms of North Carolina, Oakhurst Club LLC, Southern Minerals LLC and James C. Justice III, also known as Jay, the governor’s son who now runs the family’s coal operations. The suit claims Jay Justice is personally liable.
The debts of Governor Justice’s businesses have been an ongoing theme during both his candidacy and his governorship.
Usually, when the governor is asked about his companies’ debts, he responds by indicating that while there may be delays in paying the obligations they never go unattended.
For example, responding in late July to reports that more tax debts amounting to almost a million dollars had racked up at the Kanawha County Courthouse, Justice said those debts would be paid — but not when or how.
“I could go on and on and on and tell you, and there’s a great many details on stuff that’s twofold: One, that I can’t tell you. And two that I just don’t know,” Justice said.
“I’m not involved on day-to-day operations on our companies nearly like I was before. But I can tell you this. For us to be focused in any way on an obligation that Jim Justice has to the government, I’d love for you to say ‘What has he never paid?’”
“I’ve said it a thousand times over. Every obligation will absolutely be fulfilled.”
Justice says he has put his coal companies under the leadership of Jay Justice and The Greenbrier Resort under Jill Justice. In March, the state Ethics Commission approved a blind trust covering Glade Springs resort near Beckley and Wintergreen ski resort in Virginia.
Justice has said he intends to place the rest of his family-owned businesses in a blind trust.
“However, the process has been slowed down by the multitude of financial institutions that work with my family’s companies,” the governor wrote in a letter addressed to state employees at the end of January.
On the financial disclosure form submitted this past Feb. 1 to the state Ethics Commission, Justice marked a box saying he owes no debts larger than $5,000 to anyone residing or doing business in the state. That was several weeks after his company entered into the forbearance agreement on the helicopter debt.
One of the exemptions noted says form filers do not have to report “debts resulting from the ordinary conduct of your business, profession or occupation.”
Justice’s list of businesses goes on for 116 lines, starting with A&G Coal Corporation of Roanoke, Va., and rolling on toward WV Timber of Beaver, Raleigh County.
In between are all manner of mining, timber agriculture and hospitality operations. Justice Aviation and James C. Justice Companies are among them.