International Business

Justice’s business says it’s making progress in debt talks with international banker

Bluestone Resources, the coal company owned by Gov. Jim Justice and his family, is signaling progress in talks over almost $700 million in debt with the international finance company Credit Suisse.

A statement issued today by Bluestone referred to “several days of face-to-face meetings last week in West Virginia.”

The Justice company says it has agreed to a framework with Credit Suisse to work on restructuring debt obligations following the insolvency of Bluestone’s main lender, Greensill Capital.

Financial Times today cited a source who described “more constructive conversations” but that the announcement by Bluestone “was a little premature” and no agreement has been signed.

Credit Suisse declined comment to MetroNews and other news outlets.

The Wall Street Journal reported that strategies for making up the debt include boosting out put at coal mines operated by Bluestone, revitalizing The Greenbrier Resort owned by the Justices to bump up profitability and leveraging more profits from the Justice family’s landholdings. The Journal, citing unnamed sources, reported there are no plans to sell assets.

The Justice companies took out hundreds of millions of dollars in loans from Greensill Capital in 2018.  Greensill packaged such loans and sold them to investment funds managed by Credit Suisse.

Greensill declared bankruptcy this spring after Credit Suisse froze billions in funds.

Credit Suisse is now pressing to recover lost investments and has has named Justice’s Bluestone Resources as one of three major borrowers from the Greensill funds.

Bluestone Resources Inc CEO Jay Justice

A statement from Bluestone today referenced talks with Credit Suisse “in order to resolve a significant part of its loan exposure.”

“These constructive developments with CS will allow Bluestone to return to a state of normalcy, so that we can continue providing great quality coal and coke to our customers around the world, while providing a stable, secure situation for our valued employees and business,” stated Jay Justice, the governor’s son who runs the coal operations.

The loans to Bluestone Resources were unusual in that they were backed by “prospective receivables” that weren’t yet in hand from a list of “prospective buyers” — “a list that included both existing customers of Bluestone and other entities that were not and might never become customers of Bluestone.”

Justice’s companies have sued Greensill — accusing the company of “continuous and profitable fraud.” The lawsuit notes that Governor Justice has a 60 percent ownership interest in Bluestone Resources. Cathy Justice is also listed as a plaintiff.

The international financial story hit home this summer because of the revelation that Governor Justice and his wife Cathy had signed personal guarantees and could be on the hook for the debt following the Greensill collapse. The Wall Street Journal first reported Justice’s personal liability in a story headlined “West Virginia Gov. Jim Justice Is Personally Liable for $700 Million in Greensill Loans.”

During a briefing earlier this week, Governor Justice alluded to the likelihood of some upcoming relief.

“I hope you’ll see tomorrow a situation with the Credit Suisse people and the Greensill thing that that situation is moving in a positive direction,” Justice said Tuesday.

It turns out the timeline was off by a couple of days, but today’s statement appears to be what the governor described.

In early June, Governor Justice characterized Greensill as acting in bad faith and suggested his companies were unaware of the ins and outs of the broader relationship with Credit Suisse.

“If you knew all the details you’d know that evidently Greensill is a bad, bad actor. And in almost partnership with that you’ve got the Credit Suisse people that were tied at the hip with Greensill that we didn’t know anything about. From the standpoint of what Greensill has done, how in the world could we have ever known anything whatsoever?”