Bank of Virginia Lawyers Say Judges Use Lawsuits As “Delay Tactic” To Avoid Paying Off Loans | Legal matters


West Virginia Governor Jim Justice is suing Carter Bank to avoid paying what he owes, bank attorneys said in a recent petition in federal court.

The bank and its board of directors are asking US District Judge Frank Volk to dismiss the governor’s lawsuit, which accuses the lender of “bait-and-switch” tactics to “trick” his companies into defaulting on their loans.

If Volk doesn’t dismiss the case, Carter’s attorneys want him to at least send the case from the Southern District of the United States of West Virginia to the Western District of Virginia or to the City of Martinsville Circuit Court. , Virginia, where Carter Bank is headquartered.

The Justice family filed their lawsuit on May 31, a day before the bank’s existing loans expired.

Lawyers for the bank’s board called the lawsuit a “delay tactic” to avoid paying the “hundreds of millions of dollars” Carter owed. They said the bank “has worked on several occasions and in cooperation” with the Justice companies.

“[The Justices] are highly sophisticated parties who have had full access and the opportunity to consult with leading internal and external lawyers before entering into a deal with Carter Bank ”, the lawyers wrote in a court note.

Lawyers for the bank also said the judges had signed agreements with the bank stating that disputes over their business relationships would be filed in the Western District of Virginia or in the Circuit Court for the city of Martinsville, Virginia.

Charleston attorney and former US attorney Booth Goodwin leads Carter’s legal team. Justice defeated Goodwin in the Democratic Party’s primary for governor in 2016. Justice changed his affiliation with the Republican Party in July 2017 after taking office.

The judges are asking for at least $ 421 million in damages and a declaratory judgment that would prevent the bank from forcing them to immediately repay the loans.

Lawyers for the bank said they have signed three forbearance agreements with judges since 2017, allowing them to repay loans at lower rates or defer regular payments.

“Carter Bank has worked on several occasions and in cooperation with judges and judicial entities to restructure and / or extend various loans made by Carter Bank, as well as to extend new credits to various judicial entities. “

Bank executives informed judges earlier this year that the bank would not renew or extend two loans, worth $ 57 million, which were due to mature on June 1.

Judges sued Carter three months after suing Greensill Capital, accusing the global lender of fraud and breach of contract.

On June 2, Justice said his family’s business loans had “shifted from Carter Bank to Greensill,”

British company Greensill filed for bankruptcy in March after losing the insurance coverage that guaranteed its loans.

On the same day the judges sued Carter, the Wall Street Journal reported that Switzerland-based Credit Suisse Group was working with the Justice family’s Bluestone Resources Inc. to recoup $ 700 million from Credit Suisse’s investments in Greensill.

Justice said he personally guaranteed Greensill’s loans.

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