West Virginia Governor Jim Justice Files $1 Billion Lawsuit Against His Bank For Predatory Lending Scheme
West Virginia Governor Jim Justice has filed a $1 billion lawsuit against Carter Bank and Trust. He accuses the lender of trapping his family businesses in a ‘predatory’ loan scheme.
Justice filed the federal lawsuit last week. It names both Virginia-based Carter Bank and Trust and the bank’s CEO Litz Van Dyke as defendants. Justice also named members of the company’s board of directors as defendants.
The Governor is a plaintiff in the suit alongside his wife and son. Justice also named more than a dozen businesses in the family’s business empire as plaintiffs.
The suit accuses Carter Bank of trapping the Justice companies in a ‘predatory lending scheme. The alleged scheme was designed to perpetuate the flow of interest payments’ from the family’s $740 million loan portfolio.
If comes after Justices signed confessions of judgment in April for over $300 million. The family are seeking to have the confessions of judgment tossed in a separate Virginia state court proceeding.
A spokesperson for Carter Bank dismissed Justice’s allegations as “false and misleading”.
The 36-page complaint filed by Justice is heavily redacted. The complaint cites a non-disclosure agreement with the bank that is disputed by the governor’s attorneys.
The suit says that the Justice family built a relationship with Carter Bank from 2001 to 2017. Justice claims the business relationship was largely based on ties between the Justice family and the bank’s founder Worth Carter.
However, after the founder’s death, Justice alleges the bank blocked the family from moving their banking business elsewhere. Thus, effectively seizing control of the Justice businesses and making it impossible for Plaintiffs to pay off their loans.
The Justices alleges that after the founder’s death, Carter president Phyllis Karavatakis took over management responsibilities. She then exhibited tremendous hostility toward the Justice companies and the Justices personally.
The suit accuses Carter Bank of various instances of bad faith and misconduct.
In one case, the bank agreed to a payment deferral. However, the bank reneged at the last minute. Thus, this triggering a technical default that the bank used to impose sweeping changes to the terms of a loan.
In its statement, Carter Bank accused the Justice businesses of failing to meet their loan obligations.
Carter Bank denies the allegations contained in the redacted Lawsuit. They also say they intend to vigorously defend against all claims asserted in the Lawsuit.
The bank also said the new lawsuit is a rehash of claims from a previous May 2021 lawsuit suit the. The judge in the case case tossed out of court for lack of merit.
Justice’s businesses face a number of challenges. The DOJ filed a lawsuit in May against 13 of his mining companies. The lawsuit alleges the Justice’s companies violated their legal obligations by failing to pay penalties and fines.
The DOJ’s 128-page lawsuit alleges Justice’s mining companies failed to pay uncontested penalties assessed for their uncontested violations. The Department of the Interior cited the companies with more than 130 violations totaling $5 million in penalties.
Gov. Justice and his son have worked together to manage a sprawling empire.
In 2009, Justice reportedly made a fortune when he sold Bluestone Resources to a Russian firm. Justice was forced to buy it back amid claims of mismanagement while under Russian control.
The father and son said in a prior lawsuit they had the objective of ‘returning Bluestone to profitability,’ Forbes reported.
The billionaire governor, owner of the storied Greenbrier resort, also ‘has a hard time paying the bills,’ Forbes reported in 2019, with him and his companies facing $10 million in court fines while facing millions more in tax liens and damage awards, along with funds owed for mine reclamation.