A Virginia banking company has vowed it will get the money it says Gov. Jim Justice owes it.
In a filing with federal securities regulators Monday, Carter Bankshares, Inc., a longtime banking partner of Gov. Jim Justice and his companies, defended itself against their federal lawsuit alleging that it induced them into loan defaults.
Carter Bankshares, Inc. called the allegations in the lawsuit filed in the U.S. District Court for the Southern District of West Virginia last week “false and misleading,” saying it worked cooperatively with Justice-controlled companies in restructuring and extending loans after it told the companies it aimed to reduce its credit exposure to them about five years ago.
“Banks have an obligation to their shareholders and the financial system to collect in full all amounts that are due and owing to them,” the company said in the Securities and Exchange Commission filing. “Carter Bank is no different from any other bank in this regard.”
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, are seeking at least $421 million in damages from Carter Bank & Trust and a declaratory judgment that would keep the 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.”
The Justices said in their lawsuit that they have $368 million of outstanding loans with Carter Bank and have paid down $407 million of debt and $238.5 million in interest and fees since 2001.
The lawsuit alleges that Carter Bank has been the Justice companies’ “near exclusive financing provider” that demanded that their loan balance be converted from 20-year to short-term notes after the bank’s founder died in 2017 and induced them into defaulting.
The lawsuit was filed May 31, the same day that 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 back-up for its loans.
Carter Bankshares, the bank holding company for Carter Bank, contended in its Securities and Exchange Commission filing that the lawsuit’s timing was no coincidence, saying the loans of two Justice companies were due to be repaid in full to the bank the next day.
“Carter Bank will vigorously defend all claims asserted in the Lawsuit and expects to collect in full all amounts due,” the company said in the filing.
Neither the Justice companies’ attorney nor the Governor’s Office could be reached for comment.
The Justice company lawsuit against Carter Bank followed a lawsuit that a Justice coal company filed in the U.S. District Court for the Southern District of New York in March accusing Greensill of a “continuous and profitable fraud” enacted “under the guise of establishing a long-term financing arrangement.”
Justice said he would put his children in charge of his family’s business operations upon becoming governor in 2017.