A gusher of financial pressures is hitting all at once on businesses headed by Gov. Jim Justice, a candidate for U.S. Senate whose political pitch traditionally has been as a “business guy.”
Asked during a briefing today about the range of financial conflicts involving companies owned by his family, Justice repeated his contention that he no longer takes an active role in day-to-day operations and expressed confidence that the situations will be worked out.
Justice initially responded to the question about whether West Virginians should be confident in his business acumen, and then he circled back to it again during the closing comments of his regular weekly briefing.
“I know everybody loves to pile on on stuff, but first of all let me just say this: I’m not running those businesses. I am not running those businesses,” Justice said. “I haven’t seen a set of books from The Greenbrier and coal companies in years. I don’t run those businesses.
“But with all that being said, I promise you that many of the things that you may be seeing that are reported are skewed one way or another. You may absolutely be really surprised by the final outcomes. And I’ll promise you just this, that any obligation, responsibility or whatever it may be that these companies have, that they’ll be taken care of.”
Justice, a two-term Republican governor, has dozens of business holdings listed on his annual state ethics disclosures. The governor has not placed most of his family’s holdings in a blind trust but has repeatedly said the responsibility of running the businesses has been passed on to son Jay and daughter Jill Justice.
For many years, Justice was described as West Virginia’s only billionaire, but Forbes downgraded him after 2021 debt disputes.
Justice has announced a high-profile campaign for U.S. Senate. In the primary election, he faces Congressman Alex Mooney, who is being backed by millions of dollars from the hardline Club for Growth, which already has an advertisement portraying Justice as a “deadbeat billionaire.”
Recently, the business troubles have seemingly surfaced at once.
In the case with the most money on the line, the longtime banker for companies headed by Justice filed another round of claims last week over more than $300 million in debt.
The latest debt claims are on business holdings owned by the Justice family, including Greenbrier Hotel Corp. A previous round of corresponding debt claims was filed last month against Justice, his wife Cathy and their son Jay because they signed personal guarantees on the loans.
In a separate case, U.S. marshals have been directed to collect $88,866 in attorneys fees from Jim Justice plus two of the family’s coal companies in a federal dispute with Pennsylvania-based XCoal Energy.
And in yet another case, a federal judge ruled last week that Justice coal companies are liable for unpaid premiums under a union retiree health benefit plan dating back to 2017.
Also, federal prosecutors say Justice coal companies have fallen behind by $409,000 on mine safety fine debt payments, stacking up for this past February through May.
All of these financial problems have spiked even as the Justice family businesses explore the sale of their coal operations to settle a debt with international lender Credit Suisse and as the governor’s wages are garnished over still another debt.
“I’m very proud of my business skills and everything, but you’ve got to understand — I am not involved intricately in any way in our businesses today because I just don’t have time to do it,” Justice said today.
He concluded by saying “Our businesses will be just fine.”
Confessed judgments
Carter Bank & Trust is trying to collect on more than $300 million in debts that came due in mid-April. Last week, the bank augmented earlier claims with additional filings against businesses owned by the Justice family.
The filings are confessions of judgment, written and signed agreements accepting liability in instances of default. In such circumstances, the note may be presented to the court without even notifying the debtor or having a hearing. By signing, a borrower may sacrifice their right to be heard in court.
The confessed judgments filed by Carter Bank apply to loans on James C. Justice Companies, Justice Family Group, Greenbrier Hotel Corp., Greenbrier Golf and Tennis Club, Greenbrier Sporting Club, Players Club LLC, Oakhurst Club, Greenbrier Medical Institute, Justice Low Seam Mining, Twin Fir Estates and Wilcox Industries.
Those loans had come due April 15.
The Justice companies have pushed back by contending they’ve offered Carter Bank a fair proposal to pay down the debt. The companies have also said their constitutionally-protected due process rights are being violated through the confessed judgment claims in the circuit court of Martinsville, Va. They want a full hearing in court.
U.S. marshals
Last week, federal court officials issued writs of execution directing U.S. marshals to seize $88,866 in attorneys fees owed by Jim Justice, Bluestone Energy Sales Corp., and Southern Coal Corp.
In this case, “we command you that the goods and chattels of James C. Justice in your bailiwick, you cause to be made the sum of $88,866.24, which the above named Xcoal Energy and Resources recovered against the named James C. Justice II and make your return thereof on June 19, 2023.”
The action is in response to a Third Circuit Court of Appeals judgment from 2022 in Xcoal’s favor.
In the original case, Xcoal accused Bluestone and Southern Coal of breaching a 2017 agreement to provide hundreds of thousands of tons of coal to Xcoal for export overseas. The Justice companies had also sued Xcoal for breach of contract.
A federal judge in Delaware ruled in favor of Xcoal and ordered the Justice company to pay $6.8 million. The appeals court affirmed that.
The $88,866 now sought by marshals refers specifically to attorneys fees in the case.
Summary judgment over worker health plan
Also last week, U.S. District Judge Frank Volk granted summary judgment in a case about delinquent monthly beneficiary premiums by Justice companies.
Trustees of the United Mine Workers benefit plan filed the action on behalf of a retiree and his spouse against Bluefield Coal Corp., Bluestone Industries Inc. and Keystone Service Industries.
The Justice coal companies were supposed to have been paying into a health care plan established in 1992 under federal law.
The retired worker, Kenny Dowell, was entitled to lifetime health benefits through Bluestone Coal, his last place of coal employment. In 2017, Bluestone Coal stopped making payments on behalf of the Dowels to the health benefit plan.
The Dowells’ situation essentially serves as an example to go after the Justice companies’ nonpayment of the required benefits.
From mid-2017 to late 2022, Bluestone Coal racked up $100,396 in unpaid premiums, an amount that continues to accrue.
“The material facts are not in dispute,” Volk wrote in last week’s order. “It is undisputed that Bluestone Coal has not paid premiums since July 15, 2017.”
Volk granted summary judgment, found that the Justice companies are liable for unpaid premiums with interest and liquidated damages, plus attorneys fees. The judge ordered the plaintiffs to calculate how much that is and submit it within 30 days.
Prosecutors go after Justice companies for mine safety fines
A week ago, federal prosecutors from the Western District of Virginia went after Justice companies for failure to make good on four consecutive monthly payments on a plan to comply with fines on mine safety.
The payments were supposed to have been made in February, March, April and May and added up to $409,768.
The mine safety fines go back years.
After inspections at about 50 mines owned by Justice, the Mine Safety and Health Administration issued hundreds of citations and orders for violations.
Between 2014 and 2019, the Justice companies failed to pay monetary civil penalties for the violations, totaling $4,776,370, according to the federal prosecutors.
The federal government filed suit then over the unpaid fines, and the parties reached a settlement agreement. The Justice coal companies acknowledged and agreed to pay a little more than $5 million in total fines.
The companies were supposed to make monthly payments of $102,442 until the debt was fully paid.
“Defendants have consistently made their monthly payments late,” federal prosecutors wrote.
The payments started getting spotty in December 2021 and January 2022, but then improved somewhat after federal officials filed notice of non-compliance.
The non-payment began this past January. Federal officials repeatedly notified the Justice companies of past due amounts.
Now the federal prosecutors are asking for the court to intervene with an order to pay the past due amount of $409,768.
“If Defendants are allowed to ignore their obligations, it undermines the authority of this court and removes the incentive of these Defendants — and their mining companies — from complying with MSHA’s health and safety standards designed to protect the nation’s miners,” the prosecutors wrote.