James Justice refuses to pay the balance of $1.9m on a judgement against him and a family-owned coal company in a federal suit, said an attorney for a Pennsylvania exporter of coal.
Justice, who is seeking the Republican nomination in West Virginia for U.S. Senate, has also refused to answer information requests by Xcoal Energy & Resources which is trying collect what is owed. Attorney Daniel Garfinkel informed a federal court in Delaware.
'Xcoal demanded payment. He told Leonard Stark that it had not come through.
The hearing on Friday came only days after federal officials in Virginia filed a suit against 13 coal firms owned by the Justice Family, claiming that they had failed to pay millions in penalties due to mining law violations. Justice is not listed as a defendant. He suggested that it was a political stunt to stop his attempt to unseat Democratic Senator Joe Manchin.
Justice's companies are often the target of lawsuits for unpaid bills. An attorney for the companies stated in a Kentucky filing that only a dozen out of 100 Justice coal and farm companies are still actively operating. He also noted that "operating cash" is scarce and moved among companies just-in time. The attorney noted that company representatives testified about a 'disorganized organization' whose finances and staff are stretched to their limit.
Xcoal filed a lawsuit in Delaware against the coal magnate, Bluestone Energy Sales Corp. of Roanoke Virginia, and Southern Coal Corp. in 2018. The company claimed that both companies failed to meet an agreement for delivery of hundreds of thousands tons of coal to be shipped overseas. Xcoal entered into an agreement with Bluestone in 2017 whereby Bluestone agreed to supply Xcoal 720,000 net tonnes of metallurgical grade coal from a West Virginia mine. Southern Coal and Justice guarantee the payment and performance of Bluestone, which is a pass-through company with no assets.
Stark ruled in 2021 that Xcoal had a right to slightly more than 6,8 million dollars of damages from Justice and Southern Coal. The amount was increased later to more than 10 million dollars to include pre-judgment and post-judgment interests, attorneys' fees and cost.
A federal appeals Court upheld the damages award. Xcoal collected $8.1 from a surety bonds obtained by the defendants during their appeal of Stark's decision, but the remaining balance is still unpaid.
Is there a defense for paying the remaining one and nine million dollars in the affirmed judgment? Stark asked John Sensing an attorney from Justice. Because as I understand, we are only discussing this because your client refuses to pay and you are forcing the plaintiffs start execution proceedings against other property owned by one or more of their clients.
Sensing admitted that he was unable to immediately explain why the balance of the bill should not be paid. Justice, he said, wants to delay providing information to Xcoal, until the discovery responses of Southern Coal, and Bluestone are completed. Sensing stated that Justice plans to also seek a protective court order to limit the public's access to any of the information he may provide.
He told Stark that the issue and concern of the Governor stems from his running for a Senate Seat in West Virginia.
Sensing stated that we live in a highly polarized political climate. There's a lot of interest in Governor Sensing's Senate campaign .... The governor is very concerned that his financial information could be accidentally disclosed.
Stark, who instructed attorneys to have conversations and to submit a report on Friday, was sceptical of Justice's plans to obtain a protective order, but he said he would be open-minded.
Stark stated, "I would say that running for office per se does not give more or less rights to you than other litigants."
Emails seeking comments were not immediately responded to by the Governor's Office spokesperson or his Senate Campaign Manager.