West Virginia Gov. Jim Justice is suing Carter Bank to avoid paying what he owes, bank attorneys say in a motion filed recently in federal court.
The bank and its board are asking U.S. District Judge Frank Volk to dismiss the governor’s lawsuit, which accuses the the lender of “bait and switch” tactics to “induce” his companies to default on loans.
If Volk doesn’t dismiss the case, Carter attorneys want him to at least ship the case from the U.S. Southern District of West Virginia to the Western District of Virginia or Circuit Court of the City of Martinsville, Virginia, where Carter Bank is headquartered.
The Justice family filed its lawsuit May 31, a day before existing loans from the bank were set to mature.
The bank board’s attorneys labeled the lawsuit a “delay tactic” to avoid paying the “hundreds of millions of dollars” owed to Carter. They said the bank “has worked repeatedly and cooperatively” with the Justice companies.
“[The Justices] are highly sophisticated parties who had full access to, and an opportunity to confer with, both in-house and prominent outside counsel before entering into any agreement with Carter Bank,” attorneys wrote in a court memo.
The bank’s attorneys also said the Justices signed agreements with the bank stipulating that litigation regarding their business dealings would be filed in the Western District of Virginia or the Circuit Court of the City of Martinsville, Virginia.
Charleston lawyer and former U.S. attorney Booth Goodwin is leading Carter’s legal team. Justice defeated Goodwin in the Democratic Party primary for governor in 2016. Justice changed his party affiliation to Republican in July 2017 after taking office.
The Justices are seeking at least $421 million in damages and a declaratory judgment that would keep the bank from forcing them to immediately pay off the loans.
Bank attorneys said they have executed three forbearance agreements with the Justices since 2017, allowing them to pay back their loans at lower rates or allowing them to defer regular installments.
“Carter Bank has worked repeatedly and cooperatively with the Justices and the Justice Entities in restructuring and/or extending various of the loans made by Carter Bank, as well as advancing new credit to various of the Justice Entities.”
Bank executives advised the Justices early this year that the bank would not renew or extend two loans, worth $57 million, scheduled to mature June 1.
The Justices sued Carter three months after suing Greensill Capital, accusing the global lender of fraud and breach of contract.
On June 2, Justice said his family’s business loans had “flowed from Carter Bank to Greensill,”
British-based Greensill filed for bankruptcy in March, after losing the insurance coverage that backed its loans.
The same day the Justices sued Carter, The Wall Street Journal reported that Swiss-based Credit Suisse Group was working with the Justice family’s Bluestone Resources Inc. to recoup $700 million from Credit Suisse’s investments in Greensill.
Justice has said he personally guaranteed the Greensill loans.