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Gov. Jim Justice Faces Heavy Business Debts as He Seeks Senate Seat

Jim Justice, the businessman turned political governor of West Virginia, has been sued for years by banks, governments, business partners and former employees for millions of dollars in unfulfilled obligations.

And for a long time, Mr. Justice and his family’s businesses managed to ward off one threat after another through shrewd legal tactics, not least at odds with the gruesome persona that endeared him to so many West Virginians. As of Tuesday, he is heavily favored to win the Republican Senate primary and move toward victory in the general election, especially after the departure of Democratic incumbent Joe Manchin III.

But now, as he finishes his second term as governor and campaigns for a U.S. Senate seat, things seem more difficult. Much like Donald J. Trump, to whom he is often compared – to whom he often compares himself – Mr. Justice has faced an avalanche of costly judgments and legal setbacks.

And this time there may be too many, some suspect, for the judge, 73, and his family to fend them all off.

“It’s a simple math question,” said Steven New, a lawyer in Mr. Justice’s hometown of Beckley, West Virginia, who, like many coal country lawyers, has had contact with justice societies.

Mr. Justice and his many businesses would be able to handle some of these potential multimillion-dollar judgments in isolation, Mr. New said. But “when you add it all up and put the judgments together over time, it seems like there’s not enough,” he said.

The son of a coal tycoon, Mr. Justice took over the family business in 1993 and expanded his interests beyond coal, with acquisitions in agriculture and high-end hospitality. Like many sprawling businesses, the Justice companies incurred prodigious debts. But they’ve also gained a reputation for not paying them – and that could catch up with them.

A bank in neighboring Virginia, which has served the Justice family for decades, has begun the process of collecting more than $300 million in defaulted loans. Some of the family business’s most valuable assets, chief among them the 246-year-old Greenbrier resort, are in the bank’s crosshairs, with collections on the governor’s personal bank accounts and even his home are now a possibility. Efforts have already been underway in Virginia to seize properties owned by Mr. Justice’s son, James C. Justice III, chairman of the family’s companies.

In West Virginia, tax authorities placed liens on Greenbrier properties for millions in unpaid taxes, just months after auctioning off tax-delinquent properties owned by the governor elsewhere in the state.

The recovery of such a large debt pitted creditors against each other, sometimes to the benefit of judges. A bank sued Mr. Justice and a number of banks last month after discovering that collateral for one of its loans, land near Greenbrier, had also been given as collateral to a host of others lenders.

In another case, a federal judge forced the Justice-owned coal company to turn over a company helicopter to a creditor owed millions of dollars, who in turn agreed to share the proceeds from the sale of the helicopter with another creditor, also owed several millions. And yet, lawsuits, judgments and collection efforts continue to pile up.

Neither the governor’s office nor Justice Department lawyers responded to questions. Asked about the growing business woes, Mr. Justice repeatedly said that the day-to-day operations of his companies were overseen by his children and that he was focused on his duties as governor.

“There is no way for me to lose one second of focus on what my job has been since day one,” he told reporters in February. “I’ve put up with this nonsense the whole time I’ve been here and everything. But absolutely, I absolutely cannot take my eyes off the ball.

The most serious of Mr. Justice’s problems involves Carter Bank and Trust, a regional bank based in southern Virginia. Carter Bank had been lending to the Justice family for decades, at one point making about $775 million in Justice business loans, more than a quarter of the bank’s total net loans at the time.

The court companies had been steadily paying off that debt, but in April they defaulted on the rest of that debt — $302 million in loans personally guaranteed by the governor and members of his family. The bank demanded immediate reimbursement.

For the judges, it was — as the judge’s son described it in a deposition last summer — a “mega-crisis.” In November, the governor, his family and more than a dozen of their businesses sued the bank in federal court for $1 billion, claiming that Carter Bank engaged in unfair and coercive tactics that made repayment impossible loans.

The lawsuit against the bank hasn’t slowed things down. In January, a Virginia state court judge sided with Carter Bank, and the bank wasted no time in starting the collection process.

The court companies took the case to the Virginia Court of Appeals, saying they could not pay the bail, which could be as high as from $25 million to well over $300 million and would end the recovery process. The court said it could not halt collection efforts.

Meanwhile, the bank announced it was auctioning off the Justice-owned Greenbrier Sporting Club, much to the shock and dismay of club members, many of whom own multimillion-dollar homes near the course. golf club.

That auction is being challenged in court, and an April hearing has been postponed while discussions continue “with the goal of reaching a resolution that could address the concerns of all parties,” a lawyer for Carter Bank on file.

But the prospect of losing the sports club foreshadowed a threat to the jewel of Justice’s empire: the Greenbrier Resort. Mr. Justice’s decision to buy it out of bankruptcy in 2009 made him a state hero and since then the resort, valued at more than half a billion dollars, has hosted Republican congressional retreats, professional football training camps and large sums of money. golf tournaments, including one for LIV Golf, the league created by the Saudi sovereign wealth fund.

It’s also part of Carter Bank’s guarantees, and not just Carter’s: a loan of up to $50 million from JPMorgan Chase to Mr. Justice is also partially guaranteed by Greenbrier. Legal cases involving court activities often reveal a tangle of overlapping responsibilities, and the fight with Carter Bank is no exception. In February, Justice’s largest creditor, Credit Suisse, stepped in and sued Carter Bank. Credit Suisse, which owes about $850 million, claims in its complaint that Carter Bank’s collection efforts have made it more difficult for Credit Suisse to collect its own debt from Justice Companies.

Lawyers for Justice Department-owned companies have often argued that the companies being sued can’t pay because they simply don’t have the money. But many plaintiffs argued it was a sham: Justice officials quietly drained the accounts of companies targeted by creditors and transferred the funds to other accounts, frustrating debt collection efforts. debts.

A federal magistrate in Kentucky, where a company has tried for years to recover tens of millions of dollars in court, called actions taken by legal companies to avoid disclosing financial information “the most egregious judicial misconduct” that he has ever encountered in this area. The bench. The federal district judge overseeing the case is now considering whether to hold top Justice officials in contempt.

As these threats pile up, the judge insists that it’s all just a diversion. On his federal nomination form, he listed assets valued at about $2 billion and liabilities at less than $110 million; this list, however, does not include loans from Carter Bank or Credit Suisse, for which his companies were the borrower and he was the guarantor.

He regularly says everything will be okay in the end.

“Our family has built an empire that employs a very large number of people,” Mr. Justice said at a press briefing. “In the end, everything seems to work out.”

His creditors might not agree with that.

Thomas Link, 59, owner of a small excavation company, was hired to do some work for justice-owned companies in 2021. People told him he would regret doing business with the judges, but , he said, he was approached by the governor himself. . Several months later, Mr. Link was broke.

“’I told you so’: that’s all I heard,” he said.

On April 24, after a year and a half of litigation, Justice settled with Mr. Link, agreeing to pay him a fraction of the hundreds of thousands of dollars he says he is owed. The company has not made the first settlement payment.

News Source : www.nytimes.com
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jack colman

With a penchant for words, jack began writing at an early age. As editor-in-chief of his high school newspaper, he honed his skills telling impactful stories. Smith went on to study journalism at Columbia University, where he graduated top of his class. After interning at the New York Times, jack landed a role as a news writer. Over the past decade, he has covered major events like presidential elections and natural disasters. His ability to craft compelling narratives that capture the human experience has earned him acclaim. Though writing is his passion, jack also enjoys hiking, cooking and reading historical fiction in his free time. With an eye for detail and knack for storytelling, he continues making his mark at the forefront of journalism.
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