Gov. Jim Justice concluded a news briefing today by asking for less attention to his family’s network of businesses, saying they will be all right while eventually satisfying frequently-referenced debts.
One day earlier, a lawyer for James C. Justice Companies filed a memorandum in a long-running case to say there’s no possible way to pay a court-ordered sanction because there is no money.
The split-screen experience was playing out, yet again, in the Governor’s Office and in federal court filings over debt.
The governor was generally addressing concerns raised by reporters about the businesses. The court filing was a response to say his companies flatly can’t pay a specific fine ordered by a judge.
Justice said this at the conclusion of the briefing: “From the standpoint of Jim’s house, it’ll be fine. You can worry about it and jump up and down about it and everything else. But really and truly, Jim’s house will be fine.”
The filing in court said this: “Defendants have no operations, revenues, or unencumbered assets. Consequently, they can neither satisfy the judgment nor comply with orders to pay money.”
For many years, Justice was described as West Virginia’s only billionaire, but Forbes downgraded him after 2021 debt disputes. His federally-mandated financial disclosure for a U.S. Senate run revealed a mountain of assets — with many indicating they produce little or no income — and also a riptide of debt.
Justice is regularly asked about the debts by West Virginia reporters, usually responding by saying his adult children are in charge of the businesses, that the companies will eventually make good and that bankruptcy has not been an option to consider. Justice has never put most of the family businesses in a blind trust.
HOPPY KERCHEVAL: Bills keep piling up for Justice family businesses.
This week’s filing where the Justice companies contend they have no ability to pay came in a longstanding dispute over mineral rights leasing.
Fivemile Energy Company of Kentucky is currently trying to collect on $194,258.25 in attorneys fees and expenses, awarded as a sanction for running afoul of an earlier court order. The money was due Oct. 10.
Justice’s holding company responded by saying payment isn’t possible because there’s no money.
Lawyers for Fivemile responded that reflects a Justice legal strategy to “delay, object, and no-comply.” Those lawyers also moved for a show cause order, where the businesses and corporate officers Jay Justice, Steve Ball and Jill Justice would have to demonstrate why they should not be held in contempt. Following that, Fivemile has asked for an order that the board members of the family company should personally pay the $$194,258.25.
Responding yet again to that, lawyers for the Justice companies again said there’s no money and “no purpose to be served by the entry of further contempt orders.”
“A contempt sanction cannot be imposed against a party not complying with a court directive to pay money insofar as it lacks the ability to do so,” wrote attorney Steve Ruby, representing Kentucky Fuel Corp. and James C. Justice Companies Inc.
He wrote that the Justices have submitted bank statements reflecting their lack of funds, as well as a court filing from Carter Bank & Trust demonstrating that their assets are subject to liens.
The lawyer continued by saying “their inability to pay continues as of the date of this filing. Defendants have no funds in their bank accounts and no unencumbered assets that they could sell to generate funds to pay Plaintiffs’ attorney fees and expenses.”
Governor Justice was talking more broadly about questions over the family business’s financial strains during today’s briefing. The governor said people should be more concerned with state issues.
“At the end of the day, we can come up with something to say well, this asset has this much debt and everything else when truly it may very well have. And the numbers are enormous and absolutely the complications because of not doing what a lot of coal companies just did — when things got tough they bailed and wrote off billions and billions and billions of dollars,” he said.
“I didn’t do that because I didn’t want all these people to be stiffed.”
He concluded, “That’s made it tougher. But you need to quit worrying about Jim’s stuff.”
Similar claims of cash flow problems have been a central factor in a federal court case over Southern Coal, another Justice company, and its workers compensation obligations.
BrickStreet Mutual Insurance Company this month said Southern Coal has not complied with a permanent injunction requiring the company to pay $503,985 into a loss fund. BrickStreet says no money has been paid at all, and now the Charleston-based insurer is asking for Southern Coal to be held in civil contempt and assessed a daily fine of at least $2,500 a day.
When the federal judge in the case originally ordered Southern Coal to satisfy its contractual obligations, she made note of evidence that the company is insolvent.
U.S. District Judge Elizabeth K. Dillon wrote in a Sept. 28 memorandum order that Brickstreet’s deposition of Stephen Ball, Southern Coal’s corporate representative, “revealed that Southern Coal and its subsidiaries have no operations or employees, are not mining coal, do not have any income nor any open bank accounts, do not anticipate any operations or profit, and do not have any viable assets to liquidate.”