A federal judge has approved the sale of a helicopter formerly owned by Gov. Jim Justice’s family business over a longstanding and internationally-arbitrated debt.
U.S. District Judge Robert Ballou of the Western District of Virginia approved the sale Thursday. The helicopter is being sold for $1.4 million to B.G. Shirke Construction Technology, which is headquartered in India.
The helicopter sale represents the climax of a dispute between Justice’s Bluestone Resources and Caroleng Investments, representing the Russian mining company Mechel that bought and sold properties with Justice.
Caroleng sought the seizure over a debt of millions of dollars, with interest continuing to mount, already recognized and awarded in the federal court system.
Lawyers representing Caroleng said similar efforts will continue to unfold. Caroleng has filed collection claims in several jurisdictions around the region.
“This is just the beginning of our collection efforts. Our client is still owed over $14 million and, we plan to recover those funds no matter where they are hidden,” said Zachary Mazur, an attorney with Saracheck Law Firm, which specializes in enforcing financial judgments.
Justice sold the family’s coal assets to Mechel in May 2009 for $436 million in cash and 83.3 million preferred shares of Mechel stock. Justice then bought Bluestone back in 2015 for $5 million. The mines had closed under Mechel, but Justice reopened them.
The deal to buy back the Bluestone properties included a provision to continue paying the Russian mining company $3 a ton in royalty payments for mined coal, along with defined portions of future sales. In court filings, Caroleng claimed Bluestone withheld the royalty payments.
Mechel, Caroleng’s parent company, first made its debt case to a three-person panel for the International Chamber of Commerce, which arbitrated the dispute in Paris, France, in October 2019, two years into Justice’s first term as governor. The panel awarded $8.4 million plus pre-award interest of $1.7 million. Representatives of Mechel say the debt has continued to grow.
Caroleng, on behalf of Mechel, has been acting on a 2021 federal court order to enforce the arbitration award but has been challenged to collect on its judgment. Liquidating the helicopter, conceivably, is intended to satisfy a portion of the debt.
In the federal court system, Bluestone Resources objected to the helicopter seizure by a company “controlled by a Russian oligarch.” Bluestone’s lawyers said that if the helicopter were to be seized and liquidated then the money should instead go to different lenders higher up the debt priority list.
One of those lenders, 1st Source Bank of Indiana, jumped in to identify itself as a lender with a perfected, first-priority security interest on the helicopter. The bank said Bluestone still owed millions of dollars for the helicopter and other loans on additional property.
The recent filings indicate Caroleng and 1st Source “have entered into an agreement for the division of the sale proceeds of the Helicopter, which will be duly communicated to the escrow agent.”