A federal court ordered a coal company owned by Gov. Jim Justice to release its financial information to federal prosecutors and make its employees available for depositions.
The court order, signed by U.S. District Judge Irene Berger and filed Wednesday, comes after prosecutors indicated that Justice Energy Co., an asset owned by the governor, might not have the means to pay its $1.23 million in court-ordered sanctions.
Attorneys for Justice Energy must provide all requested information — including a financial statement form requesting information on the company’s assets, accounts receivable, other judgments or liens against it, bank holdings, available credit and expenses — by Jan. 25, per the order.
Justice Energy employees must also be made available for depositions no later than Feb. 15.
“The Defendant’s decision to simply ignore Court orders, deadlines and obligations precipitated the imposition of the contempt sanction,” Berger wrote in a footnote attached to the order. “Continuing to flout the Court’s directives is not a strategy likely to engender positive results.”
Justice companies have a history of facing in court accusations of not paying out on contracts.
Last month, federal prosecutors under U.S. Attorney Mike Stuart stated in court documents that no payment has been made by the defendant to satisfy the civil contempt sanction imposed by the court in 2016.
At the time, the U.S. attorney’s office stated it did not receive the financial information it requested from the company. However, Stuart’s office indicated in a Nov. 28 letter attached to a court filing that Justice Energy does not have the means to make good on its debt.
“Based on my conversation with you, as counsel for Justice Energy Company, Inc., there was some suggestion that Justice Energy Company, Inc., may not have the financial resources to pay the sanctions imposed by the Court,” Fred Westfall Jr., an attorney for Stuart, wrote in a letter to lawyers for Justice Energy.
S&P Global Market Intelligence first reported on Justice Energy Company’s possible inability to pay last month.
The court ordered the $1.23 million payment in a civil contempt judgment against Justice Energy in February 2016. Justice Energy Company appealed the ruling. The ruling was upheld by the 4th U.S. Circuit Court of Appeals in July 2017.
Justice has said previously that he has put his companies into his family’s control. However, he still lists Justice Energy Company as a business interest in his January 2018 disclosure to the state Ethics Commission.
James River Equipment Virginia filed its original complaint in U.S. District Court in the Southern District of West Virginia in November 2013, alleging a breach of contract and unjust enrichment for services and equipment provided to Justice Energy Company worth less than $150,000.
The two companies worked out a payment plan for Justice Energy to pay James River Equipment Virginia a total of $180,000, spread over six months. The contempt charge stems in part from failures to meet those monthly payments.
Berger issued the fine to Justice Energy Company after it failed to respond for 41 days to her order holding the company in contempt. The $1.23 million fine represents a fine of $30,000 per day that the company was in contempt. Berger found Justice Energy in contempt of court from Jan. 5, the day she issued her order, until Feb. 14.
Mechel OAO, a Russian energy company, took on the original debt from James River Equipment Virginia.
Justice sold many of his mining interests to Mechel OAO in 2009 for $568 million in cash and stock. He bought them back in February 2015 for $5 million, also taking on $130 million of its debt.
Brian Abraham, general counsel to the governor, said Wednesday he was unaware of the latest court order, but it pertains only to the governor’s private businesses and not his Capitol office.
“That wouldn’t expose anybody here to anything, nor the governor in his official capacity as governor is not exposed in any way,” he said.
Stuart, through a spokeswoman, declined to comment.
Attorneys for Justice Energy and James River companies could not be reached for comment.