West Virginia Gov. Jim Justice said he is personally liable for debt arranged by now-collapsed Greensill Capital, highlighting the pressure his family faces in turning around their sprawling coal-mining operations.
The outstanding loans are “a burden on our family beyond belief, and we’ll have to deal with it,” he said. “It’s tough, it is really tough.”
They were Mr. Justice’s first comments about the nearly $700 million in loans, which were the subject of a Wall Street Journal article on Monday.
“We didn’t have one earthly clue,” he said of the troubles that would come from borrowing money from Greensill, the
SoftBank Group Corp.
-backed financial firm that filed for bankruptcy in March. He spoke during an online news conference on the state’s vaccination program.
Mr. Justice said the loans “have always been personally guaranteed” and that he and his companies hadn’t done anything wrong. Borrowers make personal guarantees on business loans to give lenders additional comfort in the case of default.
Greensill packaged the loans and sold them to investment funds managed by
Credit Suisse Group AG
. The Swiss bank froze the investment funds in March and is in talks with Mr. Justice’s
Bluestone Resources Inc.
and other borrowers to recoup money to make investors whole, according to people familiar with the discussions.
Credit Suisse is under pressure to recover money quickly and has named Bluestone as one of three large borrowers from the Greensill funds that it has identified in its recovery efforts.
Bluestone hadn’t expected to begin repaying the Greensill loans until 2023 at the earliest, it said in a lawsuit brought in March in a New York federal court alleging Greensill committed fraud in its lending practices.
Mr. Justice on Tuesday reiterated that theme, saying Greensill is a bad actor and that he wasn’t “going to let Greensill just get by with doing bad stuff.”
A Greensill spokesman declined to comment.
Mr. Justice said his son, who is Bluestone’s chief executive, had been told by Greensill everything was fine two days before the firm filed for bankruptcy. Mr. Justice’s family had been using the loans to rebuild Bluestone, he said, after buying it back from a Russian company in 2015.
Mr. Justice said his family and companies would “continue to pay our obligations and move forward.” He promised to ignore the matter and concentrate on his work as governor. On Tuesday, he promoted a state raffle of free trucks and cash prizes to people who got vaccinated against Covid-19.
Forbes this year dropped Mr. Justice from its billionaires list, owing to Greensill’s failure. It now pegs his net worth at $450 million, down from $1.2 billion in April 2020. His wealth stems from dozens of coal companies, farms and other businesses he and his family oversee, including the famed Greenbrier resort in White Sulphur Springs, W.Va.
Write to Julie Steinberg at email@example.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8