Federal prosecutors have indicated that nearly two dozen of Gov. Jim Justice’s coal companies have made very little progress in paying off over half-a-million dollars in mine safety fine debt dating back to 2014.
Prosecutors say the Justice companies still owe $529,041 to the federal government after it received a $50,000 payment from them on Sept. 23.
The attorneys’ report was made in a filing Thursday in a Virginia federal court. It comes a month after their pending request for the court to hold the companies in contempt for failing to pay the $579,041. That request was made five months after they were required to completely pay off a $5.13 million debt stemming from an April 2020 agreement.
That debt covered five years of unpaid Mine Safety and Health Administration civil penalties dating back to 2014.
The federal attorneys said defense counsel told the government in June 2023 the companies “did not immediately have the ability†to make late payments but could borrow money from another business entity in August 2023 to catch up on the payment plan.
But in the year since then, the companies failed to comply with an adjusted payment plan, explain their noncompliance, communicate to the government an inability to pay on a modified schedule or seek alternative payment arrangements, prosecutors said in August.
Gov. Jim Justice delivers an online news briefing on Friday, Sept. 27, 2024, from his home in Lewisburg.
Courtesy photo
Feds accused Justice firms of ‘attempt to escape’
Those failures happened despite government reminders and requests — and a July 2024 notice that the government would seek court action unless the companies paid in full, the prosecutors said.
Justice has boasted that his companies have avoided filing for bankruptcy despite what has become a debt of hundreds of millions of dollars engulfing his business portfolio.
But federal prosecutors in August cited the companies’ not filing for bankruptcy protection as a reason to reject what they called an “attempt to escape†agreed-upon financial obligations and to hold them in civil contempt of court.
Delinquent mine safety fines for mines controlled by the governor and his children comprised over 13% of total debt nationwide in August, according to a Gazette-Mail review of MSHA data.
Mines controlled by Justice and his children owed $3.09 million in delinquent federal mine safety fines as of July 2023, according to data uncovered by a Gazette-Mail Freedom of Information Act request.
The attorneys told the U.S. District Court for the Western District of Virginia the Justice coal companies failed to make the payments or indicate why they couldn’t comply with a judgment ordering those payments even after federal authorities informed them of past due amounts 10 times from February through May.
“Defendants have consistently made their monthly payments late,†the attorneys said in their filing.
In April 2020, the companies consented to a payment plan mandating they pay $5.13 million to cover mine safety fine delinquencies. The U.S. Attorney for the Western District of Virginia found that the companies failed to pay or contest penalties for nearly 2,300 citations issued by the Mine Safety and Health Administration from May 2014 to May 2019.
Monthly payments of $102,442 have been due on the first day of each month until the debt is paid in full.
Justice said he would put his adult children in charge of his family’s business operations upon taking office in 2017.
Debts adding up for Justices
Justice’s companies’ track record of massive debts has led to substantial legal liabilities in recent months.
A financial disclosure report Justice filed as federally required per his U.S. Senate candidacy in July lists liabilities ranging from $87.5 million to $158.1 million.
In June, the Justices and a Virginia bank both announced the settlement of a dispute in which the bank has sought $300 million-plus in debt from the Justices.
The bank, Carter Bank & Trust, sought to collect from Justice, his wife and son after they signed confessions of judgment in April 2023 for over $300 million. Debtors allow creditors to obtain judgments against them through confessions of judgment and can be used as proof of liability.
Carter Bank reported the Justices had paid just $7.8 million of a $301.9 million debt as of the end of the first quarter, with $294.1 million remaining.
Caroleng has proposed to a federal court that it appoint Dundon Advisers LLC, a White Plains, New York restructuring firm, as a temporary receiver to seize possession of the Justice-controlled holding company Bluestone Mineral Inc. and its subsidiaries and shares.
Under the Bluestone Mineral corporate umbrella are two dozen coal and fuel companies, according to a court exhibit filed by Caroleng.
If approved, Caroleng’s proposed order would allow Dundon to seize all Bluestone Mineral assets, bank accounts and personal property, from office supplies to contracts, stock and bonds. The Bluestone Mineral entities would have to turn over all mail to the receiver, which would be authorized to change door locks and take “exclusive control of the keys.â€
Justice and five companies have faced a lawsuit seeking a $40 million-plus judgment against them in a New York trial court. That case is linked to an aborted public auction of the Justice family-controlled, historic Greenbrier Hotel due to a loan default. Justice’s family reached an agreement to stop the sale of family Greenbrier assets by pledging to pay an undisclosed amount by Oct. 24.
McCormick 101 LLC, the Maryland-based owner of the loan, sued Justice and his companies in July, saying the balance due under a $142 million loan a bank made to Justice was $40.2 million as of July 15 — 17 days past its maturity date.
New York-based JPMorgan Chase Bank assigned the Maryland company, McCormick 101 LLC, all its right, title and interest in the loan on July 2, according to the lawsuit.
