A Kentucky tobacco warehouse firm is going after any funds or property Kentucky government agencies might have belonging to two of West Virginia Gov. Jim Justice’s companies as they look to collect on what they say is a $34.8 million court-ordered judgment owed by the companies.
The firm, New London Tobacco Market Inc., and its agent, Fivemile Energy LLC, filed affidavits for non-wage garnishment Friday calling on Kentucky government agencies and one private company to keep all property of the Justice firms needed to satisfy the $34.8 million judgment against them.
The affidavits call on the four “garnishees†— entities that may be held liable if they transfer a debtor’s funds or assets upon the debtor’s request — to refrain from paying Kentucky Fuel Corp. or James C. Justice Companies Inc. money or property that have belonged to the Justice companies.
The affidavits list Justice’s son, James C. “Jay†Justice III, as indebted to Kentucky Fuel and James C. Justice Companies. The governor said he would put his adult children in charge of his family’s business operations upon taking office in 2017.
The documents were addressed to:
London, Kentucky-based FR Performance LLC, a mining company, care of registered agent Freddie Revis
Kentucky secretary of finance
Kentucky state treasurer
General counsel for Kentucky’s “Natural Resource & Environmental Protection Cabinetâ€
The Department for Natural Resources is a department within the Kentucky Energy and Environment Cabinet. The Kentucky state agencies did not respond to requests for comment. FR Performance LLC could not be reached for comment.
The affidavits list court awards of:
$16.9 million plus pre-judgement interest compounded annually at 8% interest, beginning May 1, 2012 through April 24, 2020
A separate award of $20,000 plus 8% interest compounded annually starting Oct. 14, 2011 for the first $5,000, interest beginning Oct. 4, 2012 for the second $5,000; interest beginning Nov. 22, 2013 for the third $5,000, and interest beginning April 28, 2016 for the fourth $5,000
$2.1 million in attorneys’ fees and related expenses and costs
In 2021, a Kentucky circuit court judge ruled that Gov. Justice, Jay Justice and seven of their coal companies must pay $2.99 million plus interest for violating a 2019 mine cleanup agreement they entered into with the Kentucky Energy and Environmental Cabinet.
The Justice defendants posted a letter of credit totaling $2.99 million in 2020, Energy and Environment Cabinet spokesman John Mura indicated Monday.
The cabinet is still owed interest on the principal, though the Kentucky Court of Appeals reduced the interest to 8% per year, Mura said. A judge previously set the penalty at 8% per day from Sept. 1, 2015, until paid in full.
Judge rejected ‘we can’t pay’ claim
A federal judge confirmed an $18 million-plus judgment plus interest and attorney fees in the plaintiffs’ favor in their 12-year-old lawsuit against Kentucky Fuel and James C. Justice Companies last month.
District Judge Gregory Van Tatenhove blasted the Justice companies for what he wrote was their “all-to-familiar [sic] tactics of non-cooperation and delay.â€
Van Tatenhove wrote the Justice-controlled companies have exclaimed “we can’t pay, we can’t pay!†while refusing to meaningfully respond to court-ordered inquiries or turn over responsive documents regarding their current and past financial standing.
An August 2023 order in the U.S. District Court for the Eastern District of Kentucky threw out another $17 million in punitive damages awarded in 2019 in a judgment against the Justice companies after an appeals court vacated that award upon appeal.
The plaintiffs brought the suit after Kentucky Fuel failed to mine coal under an agreement following the plaintiffs’ assignment of rights to mine coal in eastern Kentucky to the defendants in exchange for a cut of the mined coal.
Last week, the plaintiffs requested the defendants show cause as to why they should not be held in contempt for having disobeyed a court order to pay $194,258 in attorneys’ fees and expenses.
Last month, the court rejected the Justice companies’ request to indefinitely put on hold the deadline to pay the $194,258. Van Tatenhove rejected their argument that they can’t pay the fees because they have no operations, revenues or unencumbered assets.
In a July 26 order, Van Tatenhove imposed daily $250 fines on Jay Justice and fellow company executive Stephen Ball after finding the companies failed to comply with a court order to share evidence and information.
Financial woes are mounting for Justice’s business empire amid his run for a U.S. Senate seat on the Republican ticket.
The Justice-controlled landmark Greenbrier Hotel has been scheduled for a public auction to the highest bidder at 2 p.m. on Aug. 27 at the Greenbrier County Courthouse due to a loan default.
McCormick 101 LLC, the Maryland-based owner of the loan, sued Justice and his companies on July 18 in a New York trial court, saying the balance due under a 2014 $142 million loan the bank made to Justice was $40.2 million as of July 15 — 17 days past its maturity date.
Listed alongside Justice as defendants are James C. Justice Companies Inc., Justice Holdings LLC, GSR LLC, Wintergreen Partners Inc. and Greenbrier Hotel Corp.
In June, the Justice family and a Virginia bank announced the settlement of a dispute in which the bank has sought $300 million-plus in debt from the Justices. The Virginia-based Carter Bank & Trust reported the Justices paid off just $7.8 million of a $301.9 million debt as of the end of the first quarter.
Carter Bank had set up an auction of Greenbrier Sporting Club Development Co. and Greenbrier Sporting Club parcels scheduled for March to help satisfy the debt prior to the deal.
Nearly 300 West Virginia properties owned by Justice or his businesses — on which they owed almost $400,000 in delinquent taxes — went up for sale in public auctions in June 2023.
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.
In June 2024, a Delaware federal court approved the sale of shares of a key holding company in that empire to satisfy what has been an eight-figure debt owed by a Justice coal company.
The U.S. District Court for the District of Delaware has issued an order approving the sale of shares held by Justice-owned Bluestone Resources Inc. in Bluestone Mineral Inc., a holding company that court documents indicate houses a wide range of energy companies controlled by Justice and his family.
Mike Tony covers energy and the environment. He can be reached at mtony@hdmediallc.com or 304-348-1236. Follow @Mike__Tony on Twitter.
