Justice family amends Greensill complaint to deny any 'personal liability'

Jun. 6—CHARLESTON — An amended complaint has been filed by Gov. Jim Justice and his family that says family members have "no personal liability" to Greensill Capital related to a $700 million debt.

Last week, Justice said he had "personally guaranteed" the loans from Greensill, a private finance firm based in London that filed for bankruptcy in March.

"Yes, I did personally guarantee the loans," he said. "The loans have always been personally guaranteed. Greensill is the bad actor ... We have sued Greensill. We are not going to let Greensill get by with bad stuff."

That lawsuit, filed in New York, has now been amended to reflect no personal liability for Justice or any members of his family.

According to a statement released by the Justice family, the lawsuit was amended to "make clear that the Justice family members have no personal liability to Greensill or any successor claimant. The family guarantees were fraudulently induced and procured by Greensill in clear violation of West Virginia law. Senior executives of Greensill falsely assured the Justice family that Greensill represented a stable and long-term source of financing that would help rehabilitate Bluestone and its related operations and provide substantial employment for workers in West Virginia and other states."

Those loans were obtained in 2018 after Justice purchased Bluestone Coal, which owned coal mining operations in Southern West Virginia.

"It absolutely melted down to nothing and it closed," he said of the mines when he purchased them.

Justice said last week the Russian company left numerous liabilities, including taxes and pensions.

"We knew it would take hundreds of millions of dollars from the mess the Russians had left," he said. "We paid them (the liabilities). We have been rebuilding Bluestone back."

That is why the money was borrowed, but, he said, "out of nowhere" Greensill filed bankruptcy.

The amended lawsuit against Greensill alleges Justice and the plaintiffs operated in "good faith" to repay the loans, but "Defendants continuously deceived Plaintiffs as to Defendants' business operations and interest. Defendants used their business relationship with Bluestone to help prime the pump for Defendants' larger fraudulent activities..."

The amended lawsuit alleges Greensill perpetrated the fraud "by inducing Plaintiffs to believe that they had found a long-term, legitimate financing partner to support Plaintiffs' effort to rehabilitate their newly acquired Bluestone business and serve as a critical source of employment..."

But, the lawsuit alleges, an accelerated repayment schedule was pushed by Greensill and in January and February 2021, plaintiffs were pressured "with respect to the repayment debt in 2021, engaging in increasingly frantic conduct."

It also says the plaintiffs initially signed the personal guarantees because of the "understanding between the parties that the Enterprise Financing was a long-term financing," allowing Bluestone the time to "restructure its portfolio and restart mining operations, which would then generate sufficient cash flows that enable Bluestone to repay the loans beginning in 2023 at the earliest. Had plaintiffs known that the Enterprise Financing was as short-term financing, effectively callable at will, Plaintiffs would have never agreed on signing the personal guarantees."

The lawsuit asks the court for direct and consequential damages from Greensill; punitive damages allowed by law; costs, interest, expenses and attorneys' fees; pre-judgment and post-judgment interest on the Plaintiffs' damages as allowed by law; rescission of the personal guarantees; and such other and further relief as the court deems just and proper.

According to the Wall Street Journal, Greensill packaged loans and sold them to investment funds owned by Credit Suisse Group, a Swiss bank that froze the investments funds after the bankruptcy and is now in talks with Bluestone and other borrowers to try to recoup the money for the investors.

— Contact Charles Boothe at cboothe@bdtonline.com