Justice Family and Private Business Sues Virginia Bank over Loan Scheme | news



Gov. Jim Justice claims the Virginia-based bank has gone from a “lifelong financial partner” to a “self-proclaimed opponent” of his family’s companies in a federal lawsuit filed Tuesday.

Justice, his family members and the companies they run sued Carter Bank & Trust and the bank’s board of directors, arguing that after the death of the founder of Carter Bank in 2017, bank executives began to make “unfair changes” to the terms of Justice’s loans and ignored the Justice family’s attempts to contact the bank.

The lawsuit was filed on Tuesday, the day after The Wall Street Journal reports that Justice is in talks with Swiss Credit Suisse for the company to recoup nearly $ 700 million following the collapse of Britain’s Greensill Capital, which provided $ 850 million to Justice family businesses in May 2018.

Credit Suisse provided Greensill with the money before Greensill filed for bankruptcy in March after losing the underlying insurance coverage that provided a reserve for its loans.

Justice briefly mentioned Carter Bank during his COVID-19 press conference on Tuesday from his office in the West Virginia Capitol, where he answered at least three questions about his family’s private companies.

“The loans were always guaranteed in person as they flowed from Carter Bank to Greensill along the way, so it’s been a long, long time,” Justice said Tuesday.

“It’s very unfortunate, and indeed, it’s pain, and that’s all there is to it,” Justice said Tuesday before filing a lawsuit against Carter Bank.

Justice, his wife Katie and their son James “J” Justice III and 11 family businesses including Greenbrier Hotel Corp. and Greenbrier-affiliated sports and entertainment organizations are demanding at least $ 421 million in damages and a declarative decision that will deter the bank from forcing judges to pay the full amount of the loans immediately without giving them a “good faith opportunity to repay these loans.”

The judges filed a lawsuit in West Virginia on the same day that “some of the Greenbrier loans” reached their five-year maturity.

US District Judge Frank Wolf is in charge of the case.

The judges’ lawyers begin their complaint by describing the Justice family businesses, which employ thousands of people in seven states, noting that the judges were committed to “donating to various charitable causes” and the governor’s involvement in youth sports.

The first footnote of the lawsuit notes that “James K. Justice II is currently Governor of West Virginia,” and his attorneys refer to him as Governor Justice throughout the trial, even when describing events that took place prior to his first election in 2016.

In the trial that the judge, his wife and son filed against Greensill in the federal court for the Southern District of New York, the governor is referred to as JCJ II, and there is no mention of his business, philanthropic and sports history or his status as governor.

The lawsuit, filed in West Virginia federal court, says the judge and Carter Bank founder Worth Carter have a good business relationship, as well as a personal friendship that began when they met in 2001.

By the end of 2016, Carter Bank had made $ 775 million in loans to Justice-family companies, including money the bank lent to Justice companies between 2012 and 2014 amid a downturn in the coal market.

According to the lawsuit, as of Tuesday, Justice Businesses had $ 368 million in outstanding loans from Carter Bank.

Justice and Worth Carter’s relationship was so close that the governor delivered a “heartfelt eulogy in memory of his longtime friend and business partner” at Carter’s April 2017 funeral, according to the lawsuit.

Carter’s death “marked a clear turning point in the relationship” between the Justice family business and Carter Bank, “as the relationship began to deteriorate sharply and rapidly.”

In the lawsuit, the judges describe Carter and the Governor of Justice as making “handshake first, paperwork second” deals between 2001 and 2017.

“Carter Bank was a self-proclaimed ‘lifelong’ justice partner, and the handshake between Carter Bank and the justice authorities meant more than any piece of paper because of the strength of the bond, and they acted accordingly,” the judges said. in the claim.

The judges also stated: “For Worth Carter, the handshake and his word were of the utmost importance.”

After the death of Carter Worth, the Phyllis Karavatakis and Litz Van Dyck took over the banking business.

The judges say their relationship with Carter Bank soured when bank officials began giving them verbal promises about flexibility in their loan repayment plans and additional finance, but delayed and then ultimately never documented agreements, leading to technical defaults on existing loans.

“Almost immediately, newcomers Van Dyck and Karavatakis, a longtime associate of Worth Carter, showed growing hostility towards justice organizations and judges personally,” the lawsuit says.

Judges throughout the trial noted that they regularly made payments on their loans at the bank, but the new management of the bank, forcing businesses not to repay loans, accelerated the issuance of loans, making them repayable in a few months, rather than 20 years, addressing incidents like bait.

The judges also state that banking officials will not communicate with them outside of their lawyers.

The judges in the lawsuit dubbed it a “childish” communications protocol, “which the defendant’s attorney Carter Bank intends to apply with the passion of a high school lobby watcher.”

The judges said they “have no choice but to take legal action to protect themselves from current and future damage to their business,” they say Carter Bank harmed them.

“There should be no confusion – [the Justices] do not dispute that they received funds provided by Carter Bank, but also note that Carter Bank’s behavior caused serious damage to justice organizations, which, as will be demonstrated in court, will amount to at least approximately $ 421 million, ”the judges said in the lawsuit.


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