West Virginia Gov. Jim Justice Is Personally Liable for $700 Million in Greensill Loans
West Virginia Gov. Jim Justice is personally on the hook for nearly $700 million in loans his coal companies took out from now-defunct Greensill Capital, according to people familiar with the loans and documents described to The Wall Street Journal.
Mr. Justice’s personal guarantee of the loans, which hasn’t been reported, puts financial pressure on the popular Republican governor. He is also dealing with unrelated lawsuits alleging parts of his sprawling network of coal companies breached payment contracts or failed to deliver coal. Greensill packaged the loans and sold them to investment funds managed by Credit Suisse Group AG CS 1.09% . Credit Suisse CS 1.09% and Greensill ran $10 billion in supply-chain finance funds that extended financing to a range of borrowers.
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 the 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.
Bluestone’s general counsel and an outside lawyer representing Bluestone didn’t respond to requests for comment. Requests for comment from Mr. Justice’s spokesman weren’t returned.
Greensill was a once-hot private finance firm whose bankers said could have been worth $40 billion in a potential initial public offering. It attracted investment from SoftBank Group Corp. before collapsing into bankruptcy in March when it lost a key type of insurance that backed up its loans.
Greensill specialized in supply-chain finance, a type of cash advance that helps companies manage cash flow. Its unraveling sowed financial damage far from its U.K. headquarters, leading to the collapse of banks in Germany and Italy. It dealt a black eye to Credit Suisse, which sold Greensill assets to investors as relatively safe, and it imperiled the finances of British-Indian steel magnate Sanjeev Gupta. The Bluestone companies were one of Greensill’s largest clients, the Journal reported earlier.
Credit Suisse in a recent notice to investors said Bluestone owes nearly $700 million in loans.
https://www.wsj.com/articles/west-virginia-gov-jim-justice-is-personally-liable-for-700-million-in-greensill-loans-11622462401