The fight to recover funds owed to Credit Suisse clients has landed with West Virginia coal baron and senate hopeful Jim Justice and a small Virginia bank.
Already a subscriber?The latest efforts by former Credit Suisse clients to reclaim billions of dollars lent on their behalf by failed finance firmcentre on a small Virginia community bank, a coal baron with his eyes on the US Senate and a grandiose hotel with a bunker big enough to house Congress.
The lawsuit, filed in February, argues that Carter Bank received the $US226 million in “legally improper transfers” from Justice’s mining group, Bluestone Resources. “He’s the Trump of the Blue Ridge Mountains,” said a person involved in the attempts to recover Credit Suisse assets, given the two businessmen’s political leanings, sprawling business interests and run-ins with lenders.
The Credit Suisse debt recovery team, which has since transferred to UBS, is still trying to recoup $US2.6 billion. Out of the money left to reclaim, Bluestone owes $US690 million.Credit Suisse’s plan to recover the money, formalised in a deal with Justice two years ago, involved regular repayments from Bluestone up to a total of $US320 million. Then fund investors would be entitled to a share of the future proceeds when Justice and his family eventually sold the mining business.
A close friendship between Justice and Carter soon developed, and along with it, Carter Bank’s exposure to the future state governor. Carter Bank has about $US4.5 billion in assets and just 64 branches. By 2017, Justice’s businesses had borrowed more than $US750 million and Carter Bank was Justice’s biggest lender, financing his coal, farming and hospitality businesses.
The new claim against Carter Bank accuses the lender of fraudulent conveyance, where a debtor passes on assets to another party that are owed to their creditor. The suit alleges Carter Bank has engaged in “aggressive efforts to collect on debt obligations” of Justice and his family businesses, which stymied investment in the Bluestone mines – and the ability of Credit Suisse to recover the Greensill money for its clients.
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