Companies owned by Gov. Jim Justice and his family have filed a federal lawsuit, again, against their longtime banker over a mountain of debt.
The lawsuit asks for more than $1 billion in damages, contending Carter Bank & Trust has engaged in unfair business practices, kneecapping the Justice family businesses.
“Because of Carter’s significant control over their businesses, Plaintiffs have had little choice but to endure Carter’s oppression until they can escape it by paying off their loans,” wrote lawyers for the Justice companies in the federal filing.
The lawsuit was filed Monday in U.S. District Court for the Southern District of West Virginia on behalf of Governor Justice, first lady Cathy Justice, son Jay Justice and 15 of the Justice family companies.
This lawsuit came at the start of the same week the Justice companies are scheduled for a hearing Wednesday in a local courtroom in Martinsville, Va., over $300 million in confessed judgment claims by Carter Bank.
The legal and financial disputes are two sides of the same coin.
Justice contends Carter Bank made its lending philosophy stricter — and unfair — after a long and mutually beneficial business relationship. Carter simply says Justice defaulted on liabilities that were guaranteed in writing.
This is coming to a head as Governor Justice, a Republican, ramps up a high-profile run for U.S. Senate. Justice, owner of The Greenbrier Resort, is a two-term governor who first ran on his business acumen. The family’s lawsuit says “The Justice organization is one of West Virginia’s largest employers.”
The Justice companies filed federal suit against Carter two years ago on largely the same grounds, alleging that following the death of founder Worth Carter the new officials in charge of the bank instituted more rigid financial practices and transformed into a “determined, self-proclaimed adversary.”
In August, 2021, the Justices announced that conflict had been resolved, and claims were withdrawn. “It’s a real positive resolution,” Justice said in the moment. “All defaults have been dropped.”
Time passed but the tension remained.
This past April, after more than $300 million in loans came due, Carter filed about a dozen claims to collect.
These were confessed judgments, which are written and signed agreements accepting liability in instances of default. The claims name Jim Justice, his wife Cathy plus Jay, who is the named executive of the family’s coal operations.
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.
At 3 p.m. this coming Wednesday in Martinsville Circuit Court, attorneys for Carter Bank are scheduled to present oral arguments about why the court should deny motions by the Justice businesses to set aside the confessed judgment.
So now the Justices have filed their own lawsuit in federal court.
That heavily-redacted lawsuit alleges bad faith business practices by Carter Bank in recent years, casting the lender as a boa constrictor tightening its grip. That has hamstrung the Justices ability to pursue other sources of capital or to run their businesses as they see best, according to the lawsuit. Moreover, the lawsuit alleges, the bank has gone silent on communication.
The confessed judgments are a specific aspect of the federal lawsuit, with the Justices contending they shouldn’t be held liable for them.
Justice’s lawsuit contends, “The confessions of judgment violate due process in that they allow defendants to obtain judgments without affording plaintiffs an adequate opportunity to present their valid defenses. The confessions should therefore be declared void as contrary to public policy.