Justice’s companies make tentative deal over $850 million debt
CHARLESTON — If a major overseas creditor accepts, Gov. Jim Justice could get out of more than $850 million in debt, including $700 million in loans he personally guaranteed.
According to the Wall Street Journal on Monday, Justice-owned Bluestone Resources has made an offer with Swiss-based Credit Suisse Group to settle past loans to the now-defunct Greensill Capital.
Wall Street Journal Reporter Julie Steinberg wrote representatives of Bluestone offered Credit Suisse $300 million by refinancing the existing loans through a third-party lender.
The company also offered Credit Suisse half of any proceeds from the future sale or initial public offering of Bluestone, the umbrella corporation for a majority of Justice’s businesses, including coal companies.
Speaking Monday during his COVID-19 briefing, Justice said he had not seen the Wall Street Journal story, but said the description of the reporting was “accurate.”
“I think it would be very, very premature for me to have a whole lot of comment on it and everything,” Justice said. “I think the Credit Suisse folks and (Bluestone) are working together and working together really well.”
Greensill filed for bankruptcy in March after losing coverage by credit insurers meant to provide the company liability protection from risky supply-chain finance funds, a kind of payday loan meant for companies. Greensill would loan companies money, which the companies would pay back to Greensill once invoices were paid to the companies for services rendered. Greensill would take a fee.
In March, Credit Suisse froze all the funds and was working with Bluestone and other borrowers to return the borrowed money. According to the Wall Street Journal, Bluestone was one of three of Greensill’s largest borrowers, providing loans to Justice’s company in 2018.
“We got the rug jerked right out from underneath us with the Greensill folks,” Justice said. “What happened with Greensill, and I’ve said this over and over, they’re bad actors. With that, we had to work through a whole bunch of hoops and everything.”
In court documents filed in March against Greensill, Bluestone’s attorneys stated the company was not expected to start making payments on the loans until 2023. Justice has said the loans were needed to help pay off liabilities and obligations when Bluestone bought back several mines and processing facilities from Russian coal producer OAO Mechel in 2015.
This is the second settlement of a loan issue for Justice. Last month, Justice’s companies dropped a federal lawsuit against Virginia-based Carter Bank and Trust, with Carter Bank dropping a circuit court lawsuit against Justice’s companies over $368 million in loans that were also personally guaranteed by Justice.
Justice claims to not be personally involved with either case, leaving it up to son Jay Justice and daughter Jill Justice. Jay runs the coal, timber, and agricultural businesses, while Jill runs the Greenbrier Resort and associated businesses.
Bluestone is one of about 112 companies owned by Justice according to his 2021 financial disclosure report with the West Virginia Ethics Commission. Only seven of those companies were placed in blind trusts as of April 30, 2017, shortly after Justice took office. Blind trusts are used by elected officials to place their business holdings in the hands of third parties while they serve to avoid possible conflicts of interest.
Justice said that the improved business climate for coal and his other businesses have provided him the capital needed to make deals with his loan providers. Justice has also been critical of press coverage of his businesses, calling such stories a distraction from the state’s handling of the COVID-19 pandemic.
“We spend time concerned about my family’s personal finances and how that is all going,” Justice said. “I’d report to you that it’s going very well. For crying out loud, that is the last thing we need to be worried about. What we need to worry about is 3,568 great West Virginians who we’ve lost, and that’s what I do night and day. I’m going to do my job, period.”
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