A federal judge has issued a court order authorizing enforcement of a judgment for payment of over $10 million against one of Gov. Jim Justice’s coal companies.
The judge’s order, filed Thursday, came at the request of a British Virgin Islands-based firm that says Justice’s Bluestone Resources Inc. hasn’t paid any of an $8.4 million award or pre-award interest of $1.7 million a federal court found Bluestone owed in 2021.
The order, issued by District Court for the Western District of Virginia Judge James Jones, is a writ of execution, a legal order to enforce a money judgment and can be used to seize assets.
Jones’ writ requires Bluestone to pay roughly $10.1 million plus interest at a rate of 9% from May 2020 until the sum is paid — the same amount a Delaware federal court ordered Bluestone to “immediately†pay to Caroleng Investments Limited in a June 2021 order.
Caroleng said Bluestone, which Justice reported as having a Roanoke, Virginia, address in his 2023 West Virginia Ethics Commission financial disclosure, is believed to own a helicopter based in Roanoke, possibly at the Roanoke Regional Airport.
Caroleng asked the court to authorize the U.S. Marshals Service or Caroleng to “enter a secured space, if necessary by force, to seize [Bluestone’s] property†through a writ of execution. Caroleng asked to be named as substitute custodian for the U.S. Marshals Service, maintaining sole responsibility for any connected property.
Justice coal company attorney Steve Ruby said Wednesday night that Bluestone believes it will prevail in an appeal of the judgment in France, predicting the judgment Caroleng is seeking to enforce will be set aside.
The initial 2020 arbitration award in Caroleng’s favor was rendered by an arbitral tribunal in Paris, per the firm’s Delaware court complaint.
Caroleng had asked the Delaware court in December 2020 to enforce the arbitration award decided earlier that year.
The Caribbean company said Bluestone didn’t meet its obligations under a 2015 agreement under which it, under the name Caroleng Investments SPV Ltd., sold coal-producing property and assets to Bluestone in exchange for a cash payment, future royalty payments and, in the event that Bluestone resold any of the transferred property or assets to a third party, contingent payments.
Caroleng says Bluestone sold some of the equipment and property in January 2017, 11 days after Justice became governor, that Bluestone had bought from Caroleng, triggering Bluestone obligations under the 2015 agreement.
Caroleng’s request was filed a day after Justice filed a financial disclosure report required by his U.S. Senate candidacy indicating he owes between $37.5 million and $108 million in liabilities incurred between 2009 and 2023.
Justice’s financial disclosure lists accounts receivable from Bluestone valued at between $25 million and $50 million. Justice owns stock in Bluestone valued at over $50 million, according to the disclosure. Neither asset generated income of $200 or more in the time frame covered by the disclosure, which Governor’s Office Press Secretary C.J. Harvey said covered income earned in 2022 and year-to-date 2023.
Justice reported 138 assets valued at least $1.24 billion, consisting largely of accounts receivable from and stock in his coal companies, as well as a blind trust valued at a minimum of $50 million, with no estimated maximum given.
But Justice reported that just eight of those assets yielded income above $200, the largest of which was stock in Peoples Bancorp Inc., a Marietta, Ohio-based company behind Peoples Bank.
Justice pledged he would put his children James “Jay†and Jillean Justice in charge of his family’s business operations upon taking office. The governor has suggested in court proceedings and interviews since taking office that he remains familiar with his coal companies’ operations.
During an administration briefing Friday, Justice characterized his business empire avoiding a bankruptcy declaration unlike some other coal companies as an accomplishment and likened his companies’ financial woes to a family that is “sometimes are a little late on a bill here and there.â€
“But we pay them, don’t we?†Justice said.
A 2019 Forbes feature focused on Justice’s business practices included a headline describing Justice as a “deadbeat billionaire.†Forbes removed Justice from its list of billionaires in 2021 amid his business empire’s financial woes.
Retired miners and the United Mine Workers union have said the Justice family coal companies have failed to provide contractually promised prescription drug coverage intermittently in recent years, causing miners and their dependents to pay out of pocket for or go without critical drugs.
The Virginia Western District Court enforced an arbitration order against Justice’s Bluestone Coal Sales Corp. that found the company liable for $1.5 million plus interest and arbitration costs in November.
The court awarded that amount to VISA Commodities, a Swiss raw materials trader, after that company said Bluestone Coal Sales failed to honor a coal supply agreement and subsequent settlement accord.
In September 2021, Justice said Bluestone Resources had offered Swiss investment bank and financial services company Credit Suisse $300 million and half the value of the Justices’ coal firms to settle about $740 million in outstanding loans with the company.
The Justice family’s companies had been in talks with Credit Suisse after the downfall of London-based Greensill Capital, which loaned the family companies $850 million in May 2018. Justice said he personally guaranteed the $850 million in loans, putting him on the hook for paying back the remaining balance. Greensill filed for bankruptcy in March 2021.
Earlier last year, Bluestone Resources agreed to pay up to $320 million in recurring payments starting in June to lenders.
In April, Justice and his wife, Cathy, acknowledged debt exceeding $305 million in principal, interest, late charges and attorney’s fees to Virginia-based Carter Bank & Trust in a Virginia circuit court.
Justice family attorneys later filed motions in that circuit court to set aside the confessions of judgment, arguing in part that Carter Bank had breached contractual obligations.
Nearly 300 West Virginia properties owned by Gov. Jim Justice or his businesses, on which they owed almost $400,000 in delinquent taxes, went up for sale in public auctions in June.
Roughly 95% of those properties sold to other buyers for just over $500,000, according to a Gazette-Mail review of state Auditor’s Office data.
Of the 281 properties secured by other bidders, 95 were in Justice’s own name, selling for just over $75,000. Another 15 properties on which roughly $241,000 was due didn’t receive a bid.
The properties in McDowell, Raleigh and Wyoming counties were included in public auctions held in those counties.
Property taxes are a critical source of revenue for local tax bases, helping fund infrastructure, libraries, parks, public safety and schools.
Most of the properties in Justice’s name that were sold are in McDowell County, whose tax base has declined sharply amid a steep population decline. The county’s population fell an estimated 6.6% from 2020 to 2022 and an estimated 65% from 1970 to 2022, according to federal Census Bureau data.
