Credit loans

Familiar names enter legal tangle between Justice and his banker

When Governor Jim Justice and his family take on their longtime banker in court, the lawyer on the other side will be an old political enemy.

Goodwin stand

Charleston attorney Booth Goodwin, a former US attorney who ran against Justice for the Democratic nomination for governor in 2016, now represents Carter Bank & Trust. He is joined by his cousin, Carrie Goodwin Fenwick, both of the law firm Goodwin & Goodwin. They filed official notice of their performance earlier this month.

Steve ruby

Among the team of lawyers on the Justice side is Steve Ruby, who led white collar criminal prosecutions during Goodwin’s tenure. Ruby has represented the governor in a variety of cases, including a lawsuit regarding the Residence of Justice and a now inactive federal investigation into the governor’s finances.

Justice family businesses sued Carter Bank and many of its top executives in U.S. District Court for the Southern District of Virginia earlier this month over millions of dollars in loans. The lawsuit says the Justice companies have $ 368 million in outstanding loans with Carter Bank.

The lawsuit claims the Justice Firms once had a personal and relatively loose relationship with Virginia banker Worth Carter until his death in 2017, but the bank’s new leadership has instituted more and more restrictions in recent years. , tightening cash flow for family businesses.

Carter Bank says the trial allegations are false and misleading – and that it intends to collect the money loaned to the judges.

The Goodwins’ first legal move on behalf of the bank included the suggestion that the case should be dismissed or, failing that, its seat be changed to federal court in West Virginia.

“The defendants intend to seek the dismissal of this case on both procedural and substantive grounds,” they wrote.

Carter Bank contends that judges signed “dozens and dozens of notes, guarantees, loan agreements, releases and other contracts over a period of several years” with forum selection clauses requiring that claims between the parties be argued in the Western District of Virginia. , where Carter Bank & Trust and many Justice firms are based.

Goodwin and Fenwick wrote that Carter Bank has “a number of important and substantial arguments” “attacking the substance – or lack thereof – of the plaintiff’s claims”.

Goodwin and Finwick ask to plead the venue before U.S. District Judge Frank Volk first – before presenting the other arguments.

“The defendants respectfully submit that the procedural issues are preliminary questions that must be answered before addressing the substantive issues in the plaintiffs’ complaint,” they wrote.

In a statement to shareholders earlier this month, Carter Bank said it intended to collect all of Justice’s debt.

“About five years ago, Carter Bank began to reduce its credit exposure to judicial entities and has repeatedly informed judicial entities of the bank’s goal of reducing its credit exposure to judicial entities. Over the years that followed and from time to time as problems arose, Carter Bank worked cooperatively with the judicial entities to restructure and / or extend various of these loans, ”the bank wrote.

“In addition, on more than half a dozen occasions, the Justice Entities have entered into, in the context of such restructuring and / or extensions, agreements reaffirming the legality, validity and binding character in accordance with their terms. of their loan obligations to Carter Bank and releasing Carter Bank from any claims and causes of action that the legal entities may have. The most recent of these Liberation and Reaffirmation Agreements was signed less than a year ago.

The law firms argue that the bank’s new leaders have instituted more and more restrictions in recent years, squeezing cash flow for family businesses.

“The Carter Bank is no longer a ‘life financial partner’, as it proclaims and as it acted before the death of Worth Carter, but a determined and self-proclaimed adversary,” wrote lawyers for several governor-owned firms. and his family.

A separate lawsuit against another lender, Greensill Capital, points to $ 700 million in debt with that company. Greensill filed for bankruptcy this spring and sparked reverberations in the financial world.

Credit Suisse, which managed investment funds that bought loans bundled by Greensill, is now pushing to recoup lost investments and named Justice’s Bluestone Resources as one of the three largest borrowers from Greensill funds.

A recent file filed by legal counsel indicated that the parties had agreed to stay the lawsuits “to allow the parties to engage in preliminary settlement discussions.” But that standstill agreement expired on May 28, and lawyers for the plaintiffs informed Greensill and his former executives that the lawsuit would continue to move forward.