CHARLESTON, West Virginia (AP) – In a new court statement, West Virginia Gov. Jim Justice has accused a bankrupt UK bank of fraud, prompting it to personally guarantee $ 700 million in loans taken out by his companies.
In an amended complaint filed Friday, Justice’s family and coal companies allege Greensill Capital UK “has committed a continuous and highly profitable fraud.”
Justice told reporters on Tuesday that these loans are “an incredible burden on our family.” Justice company Bluestone Resources Inc., which extracts metallurgical coal used to make steel, filed a lawsuit against Greensill in federal court in New York in March.
The business concerns of the Republican governor, who was recently delisted from its billionaire list by Forbes due to growing debt, were publicly covered last week. In addition to the $ 700 million owed to Greensill, Justice disclosed in a separate claim that he’s personally on the hook for $ 368 million for Virginia-based Carter Bank & Trust.
The latest filing of a lawsuit against Greensill in the US District Court in New York shows that the governor and his wife, Cathy Justice, and son Jay Justice, personally guaranteed the repayment of the loans to Bluestone. The complaint alleges that a London bank tricked them into signing, hiding its own financial risk.
Greensill, a supply chain finance company based in London, filed for bankruptcy in March over allegations of fraud. The Financial Conduct Authority, the UK’s financial regulator, announced it was conducting an official investigation into Greensill’s collapse after receiving allegations it said were “potentially criminal in nature.”
Greensill began lending to Bluestone in 2018. According to court documents, the company applied for financing after a period of downturn in the ownership of the Russian mining and metallurgical company Mechel.
“When the Russians had Bluestone, what happened to Bluestone? He just turned into nothing, ”Justice said at a press conference on Tuesday. The company had unfulfilled obligations to suppliers and tax liabilities when the Justice family returned it in 2015.
A loan from Greensill was supposed to help rebuild the company, but by November 2020, bank officials began pushing for early repayment of the loan and additional fees, according to the complaint.
The Justice family states that they personally signed the loans only with the understanding that payments would not begin until 2023, and then Bluestone would have years to recover and generate cash flow. Justice and his companies are seeking damages from Greensill in their lawsuit.
At his press conference on Tuesday, Justice spoke briefly about his other loan from Carter Bank in Virginia, saying that he has always personally guaranteed loans for his companies.
“I personally guaranteed loans,” he said. “Loans were always guaranteed in person when they went from Carter Bank through Greensill to other banks along the way. It was like that for a very, very, very long time. “