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CHARLESTON -- Several companies owned by Gov. Jim Justice and managed by his children are suing to halt an attempt by a Virginia-based bank to collect on more than $300 million in personal loan guarantees.
Attorneys for Justice, First Lady Cathy Justice, and son Jay Justice filed a lawsuit Monday in the U.S. District Court for the Southern District of West Virginia on behalf of 15 companies against Virginia-based Carter Bank and Trust, affiliated entities, and its board of directors.
"The suit seeks in excess of $1 billion in damages arising from the defendants' illegally blocking the Justice plaintiffs from doing business with lenders other than Carter Bank," said Justice attorney Steve Ruby, a former assistant U.S. Attorney for the Southern District of West Virginia. "The suit asserts that the defendants violated the federal Bank Holding Company Act, among other laws."
The suit was filed two days before a scheduled hearing Wednesday, Nov. 15, in the Martinsville Circuit Court in Virginia, where attorneys for Justice and Carter Bank were supposed to make oral arguments. A request for comment from Carter Bank was not returned.
The Justices have made more than $300 million in personal loan guarantees to Carter Bank. Attorneys for Carter Bank have filed 21 confessed judgments since April against Gov. Justice, Cathy Justice, Jay Justice and multiple Justice-owned companies, seeking more than $301 million plus interest and attorney fees.
Carter's efforts to collect on Justice's loan guarantees comes more than two years after Justice dropped a federal lawsuit against the bank. Carter Bank filed 11 individual cases - called confessions of judgment - against Jim and Cathy Justice in an attempt to collect on those loan guarantees.
In a press release in April, Jay Justice -- who manages the Justice family's coal and agricultural businesses -- said the companies tried to reach an agreement with Carter Bank officials, offering them $250 million up front, leaving them with four outstanding loans totaling $57 million secured with $325 million in collateral.
"Our companies' refinancing plan would immediately pay off several of our loans with Carter Bank and set the stage to quickly eliminate all the remaining loans," Jay Justice said, "But the bank has blocked those efforts, instead seeking to stop us from refinancing our loans with other lenders … Unfortunately, the bank's predatory behavior will now obligate us to aggressively protect our legal interests."
Justice's companies dropped a federal lawsuit against Carter Bank in 2021, with Carter Bank dropping a circuit court lawsuit against Justice's companies over $368 million in loans that were also personally guaranteed by Justice.
The history between the Justices and Carter Banks goes back to 2001, when Carter Bank became the primary lender to his companies due to a personal relationship between Gov. Justice and Worth Carter, founder of the bank. But after Worth Carter died in April 2017, Carter Bank started seeking payment toward the loan guarantees.
According to their court filing Monday, the portfolio of loans to Justice's companies grew from a $4.5 million real estate loan in 2001 to more than $740 million between Justice's various coal, agriculture, hospitality businesses, and other companies.