West Virginia Gov. Jim Justice and his family won’t immediately have to pay Carter Bank a lump sum of more than $61 million, and Carter Bank & Trust won’t be subject to the more than $400 million lawsuit the Justices filed against the Virginia bank, as part of a settlement the parties reached earlier this week.
In the settlement, Carter Bank restructured the Justice family companies’ loans with the bank, giving the Justices a set schedule and more time to pay back what they owe.
Attorneys for the Justices and Carter Bank filed a joint motion Thursday evening to dismiss the lawsuit with prejudice, meaning the case permanently is dismissed from U.S. District Judge Frank Volk’s docket.
Per the terms of the settlement, attorneys also are working to dismiss a case in Martinsville Circuit Court in Virginia, where Carter Bank filed two confessions of judgment against Jim and Cathy Justice, ordering the couple to pay the bank $61,166,488.90, in July.
“It’s a good outcome, in that it is a win for both sides,” Steve Ruby, who represented the Justices and their companies in the federal case, said Friday.
The Justices sued Carter Bank in May, less than 72 hours before their loans with the bank were set to mature.
Justice, members of his family and the companies they manage had alleged that, after Carter Bank’s founder died in 2017, the bank’s executives began making “unfair changes” to the terms of its loans to the Justice businesses and ignored attempts by the Justice family to communicate with the bank.
In court documents, Carter Bank executives said the Justices filed the lawsuit in an attempt to avoid paying back the bank.
The Justices filed the lawsuit one day after The Wall Street Journal reported that Justice was in talks with Swiss-based Credit Suisse for the company to recoup almost $700 million following the downfall of U.K.-based Greensill Capital, which loaned Justice family companies $850 million in May 2018.
Credit Suisse had provided money to Greensill before Greensill filed for bankruptcy in March, after it lost key insurance coverage that provided backup for its loans.
Gov. Justice, in June, said he had personally guaranteed the Greensill loans, meaning he personally is liable for repaying them.
Justice, his wife Cathy, and their son, James “Jay” Justice III, and 11 family businesses, including The Greenbrier Hotel Corp. and Greenbrier-related sports and recreation entities, sought at least $421 million in damages and a declaratory judgment that would keep Carter Bank from forcing the Justices to immediately pay the full sum of the loans without providing them “a good faith opportunity to repay those loans.”
Gov. Justice’s daughter, Jillean Justice-Long, is president of The Greenbrier.
In a news release sent out Tuesday, Jay Justice, who manages most of the family’s extraction and agriculture businesses said the Justices “looked forward to a continued productive relationship with the bank moving forward.”
“This resolution clears the way for our businesses and our people to focus on what they do best: producing world-class coal and running world-class farms,” Jay Justice said.
Justice-Long also said she looks forward to a future relationship with Carter Bank, saying the company’s relationships with their business partners “are important to us.”
The Justices’ case against Greensill is pending in federal court in the Southern District of New York. U.S. District Judge Jesse Furman granted a motion to stay the case on Thursday, to allow a case involving Greensill in England to proceed.
Greensill filed court documents indicating the company’s bankruptcy proceedings in New York also are likely to be delayed while the English case plays out.