MARTINSVILLE, VA. — When you’re waiting for a ruling on $300 million owed by the business network led by a two-term governor and candidate for U.S. Senate, what’s a little longer.
The chief circuit judge in Martinsville, Va., Judge Giles Carter Greer, heard about a half-hour of arguments Monday morning from lawyers for the network of companies headed by West Virginia Gov. Jim Justice and from attorneys for the businesses’ longtime lender, Carter Bank & Trust.
By the end, the judge acknowledged there’s a lot on the line, concluding that he needs another month to consider matters and issue a written order. “I would hope to do so sooner and perhaps will be able to,” Greer said in the courtroom Monday morning.
Carter Bank wants to cash in roughly $300 million in defaulted loans, holding out signed guarantees to say the Justices should pay up.
The Justice companies are trying to hold that off. Their lawyers are pointing toward a federal lawsuit that contends Carter has engaged in unfair business practices. They aren’t trying to get a slam dunk from the Martinsville judge, exactly. Instead, they want a deeper and longer courtroom exploration of the matter.
“All we’re asking is that this case be placed on the trial docket,” said Aaron Houchens, a Virginia attorney representing the Justices.
Lawyers for Carter Bank countered that, saying they filed for compensation last spring and that they have clearly signed loan documents.
“They owe the money. There’s no question about that,” said Jonathan Hauser, an attorney representing Carter Bank & Trust.
He objected to the sheer amount of money that is owed to the bank, the interest that is accumulating, and the amount of time that has passed already. “If there is a delay, my client is going to be prejudiced,” Hauser said.
Carter Bank in April filed to collect on confessed judgments adding up to $302 million, plus interest and attorneys fees, in Martinsville Circuit Court in Virginia. The claims cited personal guarantees by Justice, his wife Cathy and their son Jay, who is the named executive of the family’s coal operations.
The confessions of judgment are written and signed agreements accepting liability in instances of default. In such circumstances, the note may be presented to the court without even notifying the debtor or having a hearing. By signing, borrowers may sacrifice their right to be heard in court.
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.
Those loans had come due April 15.
Lawyers for Justice’s companies responded by filing motions to set aside the confessed judgments in the 11 cases.
The filings contend that enforcing the judged confessions is a radical step and that the Justice companies deserve a chance to offer a more detailed defense.
Speaking for the Justice companies, Houchens pointed toward a separate, $1 billion federal lawsuit filed last month against Carter Bank and bank officials as individuals, alleging bad faith practices that have severely restrained the flexibility of the Justice companies to conduct their business.
In the local courtroom, Houchens passed out printed copies of the federal lawsuit, saying it lays out the basics of the Justice defense and later noting that federal ruling could butt up against whatever comes of the local case.
Hauser, speaking for Carter Bank, objected to the introduction of the federal filing, citing not only jurisdiction issues but noting that many of the financial details in the federal complaint are redacted.
“All he’s doing is pulling something off the internet like I could,” Hauser protested to the judge.
Greer observed, “There are a lot of redactions.”
Hauser responded, “This is a worthless document to hand up to your honor.”
Houchens countered that the federal lawsuit can be taken under advisement as a framework of the Justice companies’ defense if they were allowed a trial in the local court. “This lawsuit that’s before you deal squarely with our defense,” he said.
Hauser was incredulous.
“This action has been pending since April,” he said. “It’s the federal action that should cede to this body.”
