CHARLESTON – Gov. Jim Justice had no answers this week on why only seven of his 112 companies were in blind trusts and on the multi-million dollar loans he personally guaranteed to at least two financial institutions.
Justice was questioned during his COVID-19 briefing on Tuesday on whether the types of loans for the businesses he owns – operated by his son Jay and daughter Jill – made it difficult to pin down those business interests in blind trusts.
“My financiers could answer this question much better than me” he said.
Justice personally guaranteed $ 368 million in loans from Virginia-based Carter Bank and Trust over 15 years, followed by $ 700 million in personal loan guarantees to London-based Greensill Capital. The loans were intended for Bluestone Resources Inc. and the Greenbrier Resort.
Bluestone and the Greenbrier are two of some 112 companies owned by Justice according to its 2021 financial disclosure report with the West Virginia Ethics Commission. Only seven of these companies have been placed in blind trusts as of April 30, 2017, shortly after Justice took office as governor. Blind trusts are used by elected officials to entrust their affairs to third parties while avoiding possible conflicts of interest.
In a letter to state employees after taking office in January 2017, Justice announced that he was handing over control of his private businesses to his son Jay, who runs the coal and agriculture businesses, and his daughter Jill, who runs the Greenbrier Resort. But justice has long been accused of always being active in the day-to-day management of its businesses.
“It wouldn’t be any different if your son bought a house and the bank said they would like me to personally guarantee it” says justice. “I would say of course. From the point of view of my involvement in the house and everything that is going on, well, I have no involvement. From a business perspective and everything, of course, I talk to my kids every now and then.
Greensill filed for bankruptcy in March – justice took legal action against the company soon after – after the company lost coverage from credit insurers supposed to provide it with civil liability protection. risky business of supply chain finance, a kind of payday loan for businesses. One of Greensill’s creditors, Credit Suisse Group, demands that Bluestone Resources start repaying the loan.
According to the Wall Street Journal report, Justice and his wife Cathy Justice have guaranteed Bluestone’s loans to Greensill for unlimited amounts while Jay Justice, Bluestone CEO while Justice serves as governor, has granted several limited loan guarantees. . The funding, from 2018, covered a period of three years.
Justice, his wife Cathy Justice and several companies belonging to the Justice family filed a civil lawsuit earlier this month in U.S. District Court for the Southern District of West Virginia against executives of Carter Bank and Trust, a bank community headquartered in Bassett, Virginia.
Justice is seeking damages of $ 421 million from the bank, which the governor alleges to have engaged in anti-competitive behavior, breach of contract and breach of its fiduciary obligations. The lawsuit alleges that several of the Justice companies were tricked into defaulting on their loans, defaulting those loans and used to force the companies to agree to new loan terms. The complaint was filed a day before two of Justice’s loans were repaid in full.
Justice also alleges that Carter Bank is fighting an effort by Justice to refinance loans through a new financial institution to avoid benefiting from reduced interest rates. According to the lawsuit, Justice’s relationship with the bank deteriorated after the bank’s founder, Worth Carter, passed away in 2017.
In a report to the United States Securities and Exchange Commission last week, the bank began reducing its credit exposure five years ago due to Justice loans.
“The allegations of the trial concerning the negotiations between the parties are false and misleading”, the report read. “Banks have an obligation to their shareholders and the financial system to fully collect all amounts due and owed to them. Carter Bank is no different from other banks in this regard. As with all of its customers, Carter Bank expects the Legal Entities to reimburse in full amounts due and due within the time limits agreed upon in the various loan documents between the parties.