A Louisiana-based bank has filed a $36 million lawsuit against an historic West Virginia hotel and resort owned by the state’s governor who is running for U.S. Senate.
First Guaranty Bancshares filed its complaint July 17 in federal court in Louisiana against The Greenbrier Hotel Corporation. The hotel is owned by West Virginia Gov. Jim Justice and his family. Huntington, W.Va., businessman Marshall Reynolds is chairman of the board of the bank, which is based in Hammond, Louisiana.
The lawsuit hits The Greenbrier with another legal and financial blow, claiming it defaulted on a loan that was part of the federal government’s response to the COVID-19 pandemic.
According to the complaint, the company agreed to terms in a $35 million promissory note in late 2020 signed by Jill Justice, the governor’s daughter who is president of the corporation. The loan was part of the Main Street Program under the CARES Act meant to support smaller businesses and nonprofits through the pandemic. First Guaranty was one of more than 300 banks participating in the Main Street Lending Program that provided a total of 1,830 loans to such businesses.
The total of those loans was $17.5 billion. The federal government was responsible for 95 percent of the loans, and the banks were responsible for the other 5 percent. No payments were due the first year, and only interest payments were due for the second year. Businesses then would begin paying down the principal in the next three years.
First Guaranty’s complaint says The Greenbrier has paid nothing on the loan. With interest, late fees and expenses, the bank says The Greenbrier now owes $36,586,423.
Counting the principal, accrued interest, late charges and expenses, First Guaranty says The Greenbrier Hotel Corporation owes $36,586,423, and interest of $20,626 is accruing each day.
A scheduling conference in the case is set for October 17.
This lawsuit is just the latest legal and financial setback for Justice, his family and his businesses.
The Greenbrier was scheduled to be sold in foreclosure August 27 at the Greenbrier County Courthouse after ownership allegedly defaulted on a multimillion dollar loan originally provided by JPMorgan Chase. But the hotel announced August 22 it has reached an agreement with Beltway Capital, a credit collection company, to stall the sale.
Under the agreement, Beltway will receive a specific amount by October 24. The hotel says it already has secured the needed funding, according to a statement. Beltway reserves the right to foreclose if the Justice family doesn’t uphold its end of the bargain.
Also, the Amalgamated National Health Fund says The Greenbrier is four months behind on payments for employee health insurance. If the millions owed aren’t paid by August 27 (the same day of the scheduled Greenbrier foreclosure sale), the health fund says benefits for about 400 union Greenbrier employees will be suspended.
And, the state Tax Department has several sales tax liens on The Greenbrier that total nearly $3 million, and overdue property taxes for The Greenbrier and related businesses are listed with Greenbrier County for about $2.2 million.
All of these financial and legal issues have led to the West Virginia Democratic Party to ask Justice, a Republican, to drop out of the race for the U.S. Senate.
“It’s one thing to default on a bank loan or a tax obligation or even a fine from a regulatory agency,” Democratic Party Chairman Mike Pushkin said in a press release. “It’s another thing altogether to fail to pay the health care premiums for your workers with money that isn’t even yours. Because of his negligence, hundreds of workers and their families may lose their health care coverage.
“The governor can’t blame this on politics. He can’t blame it on accounting error. He can’t blame it on anyone else but himself. His financial house of cards is falling down around him, making him a terminally compromised candidate.
“Under these circumstances, he can’t continue to seek election to the United States Senate. He has become a national embarrassment.”
Justice has said the financial woes are politically motivated by Democrats and others who don’t want him to possibly help tip the Senate majority to the Republicans.
“At the end of the day, it has to be driven by something,” Justice said during one of his recent weekly press briefings. “I truly do believe that it is a political play. Everybody in the world that I talk to says the same thing. It is a political play. I’m running for the U.S. Senate and with al honesty it carries a terrific burden.
“I truly believe with all in me if I’m not running for U.S. Senate, you’d have never heard about this.”