CHARLESTON — This week shaped up as a momentous one for Gov. Jim Justice’s legal and financial conflicts, but the calendar has been clearing.
Originally scheduled for Wednesday was a hearing in Martinsville, Va., on whether Justice and his family businesses truly owe $300 million after defaulting on loans. But lawyers for Justice moved for that hearing to be rescheduled, and the judge agreed to move the hearing to Dec. 11.
And today, a federal judge had called a hearing to sort out who should rightfully have possession of a helicopter the Justice family uses for business. But a change of venue wiped that out.
The first hearing would have been the most financially consequential.
This past April, after more than $300 million in loans came due, Carter Bank & Trust filed about a dozen claims to collection confessed judgments, which are written and signed agreements accepting liability in instances of default. The claims name Jim Justice, his wife Cathy plus their son Jay Justice, who is the named executive of the family’s coal operations.
The confessed judgments filed by Carter Bank apply to loans on James C. Justice Companies, Justice Family Group, Greenbrier Hotel Corp., Greenbrier Golf and Tennis Club, Greenbrier Sporting Club, Players Club LLC, Oakhurst Club, Greenbrier Medical Institute, Justice Low Seam Mining, Twin Fir Estates and Wilcox Industries.
On Wednesday in Martinsville Circuit Court, attorneys for Carter Bank had been scheduled to present oral arguments about why the court should deny motions by the Justice businesses to set aside the confessed judgment.
However, at the start of this week, a lawyer for the Justice companies filed a motion to reschedule, saying he could not be available at the day and time of the hearing. Attorney Aaron Houchens for the Justice companies said he was scheduled to be in court in Roanoke at that time on another matter.
Lawyers for Carter Bank countered that the motion to reschedule “epitomizes the gamesmanship” that the Justice companies “have employed to hinder and delay Plaintiff Carter Bank & Trust from collecting on the many outstanding loans Defendants obtained from Carter Bank over the years.
Carter Bank’s lawyers characterized the motion to reschedule as a last-minute effort to delay and asked the judge to reject it.
“Defendants’ claim of unavailability is disingenuous at best,” wrote the lawyers for Carter Bank.
Nevertheless, the hearing has now been rescheduled for Dec. 11.
In a synopsis of Carter Bank’s third quarter financial performance, the company noted the significant impact of placing loans with an aggregate principal value of $301.9 million on nonaccrual status.
“We are obviously disappointed that our largest lending relationship remains in nonaccrual status and continues to have a negative impact on our financial results,” stated Litz H. Van Dyke, chief executive officer.
Carter went on to state that it continues to initiate collection processes and explore all alternatives for repayment.
“The Company believes it is well secured based on the net carrying value of the credit relationship and appropriately reserved for potential losses with respect to all such loans based on information currently available. However, we cannot give any assurance as to the timing or amount of future payments or collections on such loans or that the Company will ultimately collect all amounts contractually due under the terms of such loans.”
Meanwhile, a hearing over possession of a helicopter for the Justice businesses is being rescheduled, too.
U.S. District Judge James P. Jones of the Western District of Virginia, Abingdon Division, had called for a hearing today about who really has the rights to the 2009 Bell helicopter.
Caroleng Investments Limited, parent company to the Russian mining company Mechel that bought and sold properties with Justice, is seeking the helicopter’s seizure over a debt now piling as high as $13 million that was already recognized and awarded in the federal court system.
Caroleng hasn’t been able to collect on its judgment through other means. Liquidating the helicopter, conceivably, could satisfy a portion of the debt.
U.S. marshals were directed to seize the helicopter, a reflection of executing judgments already rendered several years ago in the court system.
The Justice family’s Bluestone Resources has objected to the helicopter seizure by a company “controlled by a Russian oligarch.” Bluestone’s lawyers say that if the helicopter is seized and liquidated then the money should instead go to different lenders higher up the food chain.
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.
Lawyers for the Justice companies filed an objection to the case’s venue in Abingdon. Judge Jones granted a motion to transfer the case to Roanoke, Va., and canceled the hearing.
That switch to Roanoke has been made, but a new hearing date has not been set.
