Another plaintiff laying claim to millions of dollars from the businesses owned by Gov. Jim Justice and his family is asking a federal court to get moving.
That’s because there are so many competing interests in the courts system for assets of the Justice companies. The concern is that a claimant not appropriately positioned could lose out to the others as Justice assets are divided in court.
Multiple conflicts adding up to more than a billion dollars pose financial threats, run up against each other and sometimes are in tension with one another.
The Justice companies last week announced settlement of a $300 million dollar dispute with longtime creditor Carter Bank & Trust, so that financial threat moves to the backburner. In general, Carter holds claim to several branches of the family’s business network, including Greenbrier Hotel Corporation, Greenbrier Golf and Tennis Club and Greenbrier Sporting Club.
Separately, a federal judge ordered Bluestone Mineral, a Justice holding company, to be prepped for sale to satisfy longstanding debt of more than $10 million to Caroleng Investments Limited, a subsidiary to the Russian mining company Mechel. Bluestone Mineral is an umbrella of several coal-focused businesses such as National Resources Inc., Bluestone Coal Sales Corp., Nufac Mining Co., Frontier Coal Co., and Kentucky Fuel.
That claim is intertwined with a gigantic debt to GLAS Trust Company, a successor to now-defunct Greensill UK, which alleges that Justice’s Bluestone Resources owes it at least $700 million from defaulted loans. The possible future sale of Bluestone mining assets has been part of an announced agreement over that debt.
The federal judge in Delaware who ordered liquidation of Bluestone Mineral last week made clear that other creditors should be notified and involved. That certainly means Caroleng and GLAS, but it could mean more.
Yet another entity claiming a big debt from Justice is responding to all of those others, expressing concern that it could be left behind.
Fivemile Energy, which has been suing the Justice companies on behalf of New London Tobacco Market since 2012, is trying to get a federal judge to finally act on an $18 million claim over a mineral rights leasing dispute.
Fivemile was awarded that amount in federal court in Kentucky in August 2023, but collection has been held up by delays in court. The company that Fivemile has been suing, Kentucky Fuel, is one of the subsidiaries of Bluestone Mineral, which could be sold to satisfy the debt to Caroleng.
With the more aggressive timetable over Caroleng’s claim, Fivemile is worried about being left behind. Lawyers filed a motion for expedited consideration, saying the claim for Caroleng “will significantly or completely impair the plaintiffs’ ability to collect on its forthcoming judgment in this long-running case.”
“Time is of the essence in resolving the matters now before the Court,” wrote the lawyers for Fivemile.
Lawyers representing the Justice companies have contended there’s no money to pay Fivemile and have asked to be off the hook indefinitely. In a response to the latest motion, lawyers for the Justice companies open by saying, “There is no emergency here.”
“In truth, the motion is merely an excuse for Plaintiffs’ continued efforts to evade the reality of this case,” wrote lawyers for the Justice Companies and Bluestone Resources. “They possess judgments against two entities that are defunct, a fact about which there is no serious dispute.”
The lawyers for the Justice companies then make reference to one of the other financial disputes, saying GLAS Trust Company and its claim of about $700 million has the most leverage.
“It bears noting that all the assets of BMI’s parent, Bluestone Resources, Inc. are encumbered by a perfected security agreement with GLAS Trust Company LLC. GLAS therefore would receive
the proceeds of any sale of such assets; Plaintiffs have no avenue to benefit from such a sale even if they possessed a judgment against BRI or BMI (which they do not, and cannot consistent the
facts and law in this case),” wrote the lawyers for Justice.
The lawyers for Fivemile then shot back that their claim does have bearing. But Fivemile said resolution is important because it would not be considered a creditor of Kentucky Fuel until the court issues a final judgment.
“Consequently, the Plaintiffs seek to protect their rights as creditors and to receive notice to protect their interests.”
Governor Justice, last week, advised reserving judgment on the financial disputes.
“You need to stay tuned and watch what happens.”