Apr. 25—A previous settlement between the Justice Companies and Carter Bank & Trust has led to a "significant lending dispute."

Jay Justice, son of Gov. Jim Justice and President and CEO of the Justice family properties, announced Monday that an agreement with the bank could not be reached "despite having secured a refinancing opportunity that would pay Carter Bank $250 million in immediate cash and provide a path to completely pay off the companies' Carter Bank loans within months."

Jay Justice said the current financing plan was part of a previous agreement that would "retire seven of the eleven loans they hold with Carter Bank and result in an immediate cash payment of more than $250 million to the bank."

The businesses' remaining four Carter Bank loans, totaling approximately $57 million, would be secured by collateral appraised at more than $325 million, he said, and the Justice plan includes "the sale or refinancing of assets that would completely retire the remaining Carter Bank loans within four months."

According to Justice, Carter Bank currently receives more than $20 million a year in interest revenue from the Justice businesses. When the Justice loans are paid off, that revenue stream will be eliminated, and, as explained in the Justice companies' previous court filings against Carter Bank, the bank "refuses to seriously discuss such payoff proposals."

Justice also said that after the Justice Companies developed their current payoff plan, the bank responded with "an improper court filing in Martinsville, Virginia Circuit Court, apparently in a last-ditch effort to retain a revenue stream that routinely accounts for a large portion of the bank's revenue."

Carter Bank is headquartered in Martinsville and has branches throughout Southwest Virginia, including Wytheville, and western North Carolina.

"Our companies' refinancing plan would immediately pay off several of our loans with Carter Bank and set the stage to quickly eliminate all the remaining loans," Justice said, "but the bank has blocked those efforts, instead seeking to stop us from refinancing our loans with other lenders. The inability to reach agreement with the bank is astonishing, particularly in the current business climate for small banks, which should make a $250 million payoff exceptionally attractive to the bank, its shareholders, and its depositors. Unfortunately, the bank's predatory behavior will now obligate us to aggressively protect our legal interests."

In 2021, the Justice family sued the bank, seeking damages of $421 million related, in part, to financing arrangements for outstanding loans.

That action was after Carter Bank had filed a lawsuit regarding $58 million in loans that, they said, were "personally guaranteed" by Gov. Jim Justice and his wife Cathy.

Justice Entities had about $368 million of debt in outstanding loans with Carter Bank, which, according to the complaint, was the remaining debt from $775 million in loans in 2016 with $407 million of that paid down.

But in September 2021, a resolution was reached that created a plan for the Justice Companies to repay the debt, and the legal actions in the case were dismissed.

At that time, and again on Monday, the Justice Companies blamed changes made at Carter Bank after its founder, Worth Carter, died in 2017.

"Our family enjoyed a rock-solid lending relationship with Carter Bank for more than 20 years, when the bank was under the leadership of its founder, the legendary Virginia banker Worth Carter," Jay Justice said Monday. "It is truly regrettable that since Mr. Carter's death in 2017, the bank's current management has consistently chosen to act in bad faith in their dealings with the bank's largest borrower—even as we have paid the bank more than $580 million in principal reduction and more than $100 million in interest during that six-year span."

"The Justice family will demonstrate that the bank's new court filing is nothing more than an illegal attempt to stop us from working with other lenders," he added. "It is unimaginable that a bank would deny a customer the ability to pay off a loan."

— Contact Charles Boothe at cboothe@bdtonline.com

Contact Charles Boothe at cboothe@bdtonline.com