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Justice's Bluestone company accused of defaulting on loan agreement

Chris Jackson
The Associated Press File
West Virginia Gov. Jim Justice celebrates his reelection at The Greenbrier Resort, Tuesday, Nov. 3, 2020, in White Sulphur Springs, W.Va.

Read the original story at WV Public Broadcasting.

An Indiana bank that’s a creditor of Bluestone Resources, a Roanoke-based coal business owned by the family of West Virginia Gov. Jim Justice, has sued the company in federal court for breach of contract.

1st Source Bank, of South Bend, Indiana, filed a complaint this week in the U.S. District Court for the Western District of Virginia. 1st Source seeks $4.5 million in damages.

The complaint accuses Bluestone of defaulting on loan agreements, and also seeks attorney’s fees and possession of collateral.

According to the complaint, that collateral consists of “equipment owned by Bluestone Coal” and three properties that are part of the Wintergreen Ski Resort near Charlottesville.

Bluestone was ordered by a federal judge last month to surrender a helicopter to partially settle a $13 million debt owed to another creditor, Caroleng Investments.

Court filings revealed Caroleng to be an offshore shell company incorporated in the Caribbean tax haven of the British Virgin Islands.

1st Source had also claimed a senior interest in the Bell Textron Canada helicopter. Caroleng and 1st Source reached an agreement last month for the sale of the helicopter. The judge must still approve the sale.

Justice, a Republican candidate for the U.S. Senate this year, faces new questions about his businesses and numerous lawsuits seeking repayment of what his companies owe creditors.