There is an old saying about debt: “Running into debt isn’t so bad. It’s running into creditors that hurts.”
Gov. Jim Justice and his family businesses have borrowed a lot of money over the years, hundreds of millions of dollars. That is not unusual. Big-time business people borrow from banks for operating capital and for investment in their companies, with the understanding by both parties that the money will be paid back with interest.
It is in the “paying back” part where Justice and his companies have run into trouble.
As MetroNews’ Brad McElhinny reported, Carter Bank of Virginia has filed claims over $58 million in loans to Justice businesses The Greenbrier Sporting Club and Oakhurst Club that have gone into default.
To make matters worse, Justice and his wife, Cathy, signed guarantees for the loans, which makes them personally accountable for the money. The $58 million is a portion of the $368 million Justice companies owe the bank, according to court records.
The claim by the bank follows the disintegration of the long business relationship Justice had with Carter Bank. Justice companies sued the bank last month, claiming a “lifetime financial partner” agreement with the bank collapsed when the bank’s owner and close Justice friend, Worth Carter, died in 2017.
Meanwhile, another twist emerged. As the West Virginia Record first reported Monday, the Internal Revenue Service had filed a tax lien of more than $8 million against Jill Justice Long, Gov. Justice’s daughter and president of The Greenbrier resort.
The Record reported that the lien, filed in Greenbrier County last March, is for personal income taxes owed, the bulk of which — more than $6.5 million — is for the 2009 tax year.
As McElhinny reported, “That is the year the Russian company Mechel bought the Justice family’s coal operations, Bluestone Coal Group, for $436 million in cash and $83.3 million Mechel preferred shares. And that is the year the Justice family bought The Greenbrier resort out of bankruptcy.”
It is unclear if those transactions are related to Jill Justice’s tax issues.
According to the IRS, when an individual fails to pay taxes due, “The IRS may levy [seize] assets such as wages, bank accounts, Social Security benefits, and retirement income. The IRS also may seize your property [including your car, boat or real estate] and sell the property to satisfy the tax debt.”
While all this is bubbling to the surface, there is still the issue of $700 million in loans Justice companies owe to financial services company Credit Suisse. That company is trying to collect on those loans, which also have been personally guaranteed by Justice.
Justice companies have a history of slow paying creditors and financial disputes with vendors that often end up in court or with companies settling for less than the full amount. But these most recent financial problems are on a much larger scale.
Clearly, Carter Bank has had enough, and it is more interested in collecting the money it is owed than just having Justice as a high-profile customer. As for Jill Justice, it is never a good day when the IRS files a tax lien against you.
Gov. Justice, when asked about the reports Tuesday, dismissed the significance.
“Just sit back and wait for the final outcome,” Justice said, adding that, in the meantime, “my effort is wholeheartedly behind running the state.
“If truth prevails, you will see a very positive outcome.”
For the sake of Gov. Justice, his family, the famed Greenbrier resort and the state of West Virginia, I hope so. It would be a financial tragedy for Justice — and a major embarrassment for the state — if the man elected, in part, because of his professed business skills ends up selling off what he owns to pay the creditors or, worse yet, declares bankruptcy.