Judge enters ruling for company seeking $18 million from Justice companies

A federal judge has entered a ruling in favor of another plaintiff laying claim to millions of dollars from the businesses owned by Gov. Jim Justice and his family.

U.S. District Judge Gregory Van Tatenhove entered the order last week in the Eastern District of Kentucky.

Fivemile Energy, which has been suing the Justice companies on behalf of New London Tobacco Market since 2012, has been trying to finally collect 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 judge’s order may, in effect, allow Fivemile Energy to get in line with other Justice creditors in a big tangle of debt cases.

Justice is a two-term Republican governor now running for U.S. Senate. His family company branches into dozens of businesses in the tourism, mining and agriculture industries. Once considered West Virginia’s only billionaire, Justice made his political reputation on his business acumen. As recently as last week, he used that reputation in support of a proposed tax cut: “So we better listen to a business guy that’s got a track record that’s probably doggone good.”

Multiple financial conflicts involving the Justice companies add up to hundreds of millions of dollars and sometimes run up against each other.

Last month, a federal judge in a separate case in Delaware 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 made clear that other creditors should be notified and involved. The judge’s June 20 order provided 30 days for Bluestone Mineral to be placed into the hands of a receiver and sold — which means a July 20 sale.

Responding to that mess last month, Justice said “stay tuned and watch what happens.”

Kentucky Fuel, the company being sued by Fivemile Energy, is a subsidiary of Bluestone Mineral. So it has an interest in what happens in the other debt case.

Lawyers for Fivemile pushed for resolution in their own federal case in Kentucky by filing 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.”

So now Fivemile has the order it needs to stake a claim in the other debt case.

The Fivemile case has also spun into a related dispute over a contempt award of attorneys fees. Attorneys for Justice in October filed a motion to put off the deadline for payment of $195,258 indefinitely, contending the Justice businesses lack the ability to pay: “Defendants can neither satisfy the judgment nor comply with orders to pay money. Defendants have no operations, revenues, or unencumbered assets.”

Judge Van Tatenhove, in a spicy filing this week, denied the Justice motion to put off payment forever.

“The Defendants’ argument is not new—their alleged inability to pay has been before the Court previously. In all actuality, their alleged insolvency is why this case still
exists,” the judge wrote.

“For a while now, the Defendants have claimed that they have no ongoing operations, no employees, no revenue generating activities, and had operated at a loss in the years immediately preceding the award of default judgment. The Plaintiffs response has consistently been that while it may be the case that the Defendants bank accounts show zero, the Defendant corporations are part of ecosystem of corporate entities closely controlled by the Justice Family.

“The Plaintiffs also believe there to be a potential of finding evidence related to the fraudulent transfers of assets from Defendants to affiliated companies and insiders.”

Lawyers for Fivemile sought more information through the court system about how the Justice businesses operate as part of the effort to collect on the judgment.

“Unfortunately, due to the Defendants’ all-to-familiar tactics of non-cooperation and delay, more years have passed, and no one on the outside is closer to understanding the corporate web within which Defendants are only two strands,” the judge wrote, an apparent reference to company officers Jay Justice and Stephen Ball. “That being the case, the Court is unconvinced that a continuance of any duration is warranted.”

An order filed last October by U.S. Magistrate Judge Hanly Ingram was meant to push toward more information about how the Justice companies operate and whether they truly can’t afford to pay.

This week’s filing on the lawyer fees by Judge Van Tatenhove concluded, “The Defendants’ own actions are the very reason why the Parties are at this juncture. On the one hand, the Defendants exclaim ‘we can’t pay, we can’t pay!’ Yet, on the other hand, the Defendants refuse, even after being ordered to do so by Judge Ingram, to meaningfully respond to interrogatories or to turn over responsive documents related to their current and past financial standing. The Defendants cannot have their cake and eat it too.”

More News

Clendenin Elementary School to bring modern classrooms and industry standard resources to its students
A ribbon-cutting ceremony for Clendenin Elementary School will be held on August 15.
July 22, 2024 - 10:02 pm
Two in custody after Ohio pursuit ends in Charleston
Two people were apprehended near the split of Interstate 64 and 77 in Charleston Monday evening.
July 22, 2024 - 9:30 pm
West Virginia delegates to Democratic National Convention announce support for Kamala Harris
The West Virginia Democrats said her nomination will not only break barriers but also paves the way for a more inclusive and representative democracy.
July 22, 2024 - 7:22 pm
Yeager Airport hosts media day to lay out plans for construction of new terminal building, other improvements
July 22, 2024 - 4:42 pm