Gov. Jim Justice leveled criticism at a reporter and a Russian mining company over a federal judge’s order to force the sale of a key component of his family’s business network. And the governor suggested that forced sale could be complicated because a different, bigger creditor has a stronger claim to the property.
“What I would tell you is if you are going to report something that is basically just a hit job, I would do my job if I were you,” Justice said today in response to a MetroNews question about the federal court order. “You need to stay tuned and watch what happens.”
U.S. District Judge Richard G. Andrews entered an order late last week that kicks off the forced sale of Bluestone Mineral Inc., a holding company in the Justices’ expansive business network. Several Justice companies in the coal mining industry are among the businesses underneath Bluestone Mineral.
The action is meant to satisfy at least a portion of a debt to Caroleng Investments Limited, representing the Russian mining company Mechel that bought and sold properties with Justice years ago.
Caroleng claims debt of more than $10 million — an amount that continues to grow — over royalties included as part of the deal with Bluestone. An international arbitration panel rendered judgment favoring Caroleng several years ago, and that company has been pursuing payment in federal court districts such as the one in Delaware.
“The reality is just this, and here’s all I can possibly say: You need to stay tuned and watch what happens. You also need to remember that the Russians bought Bluestone from our family and then turned it into the godawfulest mess you’ve ever seen in the world. And it literally — literally — would have caused so much harm to a lot of great West Virginians, our environment, so many different things, taxes and on and on and on that we’ve taken care of.”
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The financial conflict has been simmering in court and now has come to a boil. A few months ago, the federal judge in Delaware issued an order for U.S. marshals to begin taking control of the properties to satisfy debt obligations. That earlier order gave the Justice companies 20 days to provide a response, but the judge said there was no response over a four-month period. So now he brought down the hammer.
The judge’s filing says sale should proceed 30 days after his order with a process for looping in the creditors in Justice’s other debt conflicts and appointment of a third-party financial guardian to take control of Bluestone Mineral until shares of the business are ultimately sold.
The other creditor is a biggie.
A successor to now-defunct Greensill UK financial services company has stated that Bluestone owes it at least $700 million from defaulted loans. Greensill declared bankruptcy in spring 2018 after the international financial giant Credit Suisse froze billions in funds. Credit Suisse then began pressing to recover lost investments and has named Justice’s Bluestone Resources as one of three major borrowers from the Greensill funds.
Two years ago, Credit Suisse announced an agreement, with an element of securing the future for Bluestone’s mining operations, alluding to the possibility of a future sale. Since then, the Swiss bank group UBS has completed acquisition of Credit Suisse.
Bluestone Resources, on the Justice organization chart, is at the top and above Bluestone Mineral, the holding company subject to the forced sale in federal court.
So, the federal judge in the Russian mining company debt claim took note of other creditors — and then Justice’s remarks specifically mentioned Credit Suisse as a major player in the situation, possibly one with a greater claim on the collateral.
“And literally the dispute with the Russians and the idea that they can now because of a federal judge has done this and that and the other thing they can sell parts of Bluestone or whatever like that, the folks at Credit Suisse and UBS have the first in regard of all of this,” Justice said.
“You know, it’s just something else for us to throw mud at Jim about and everything else, or you report and everything. You’ve got to do your job. You’ve got to absolutely know that absolutely at the time we bought this back from the Russians, think about it — think about what was out there, think about the magnitude of the damage they caused to the environment, they’d caused to people, they’d caused to vendors, they’d caused to taxes, caused to everything else. And who took care of all of it?”
The governor, who is a candidate for U.S. Senate, then concluded: “At the end of the day, I am telling you, when the point in time comes when we’re siding with the Russians, we’re pretty dadgum desperate.”