The Bank Slate


New legal battle arises between Va. bank, W.Va. governor

West Virginia Gov. Jim Justice, his family and related parties have filed a lawsuit against Carter Bankshares, alleging that the Martinsville, Va., company has violated federal banking regulations.

The family, which has legally sparred with the $4.1 billion-asset Carter for years, alleged in the lawsuit filed in the U.S. District Court for the Southern District of West Virginia that the company has barred family businesses from taking actions, including turning to other banks, to repay more than $300 million in loans.

The lawsuit, which claims that Carter is trying to hold onto millions of dollars of interest income, is seeking at least $1 billion from the bank.

“Defendants’ predatory, unlawful conduct has caused, and will continue to cause, enormous past and future damages to plaintiffs,” the lawsuit claims. “Faced with defendants’ bad-faith conduct, plaintiffs have no choice but to bring this lawsuit to remedy the ongoing and future harm to their businesses that defendants have caused.”

Carter responded in a regulatory filing, claiming that the allegations are similar to those in a lawsuit that was dismissed in September 2021 “with prejudice to the Justice Parties’ right to bring it again.” Carter denied to allegations and said it would “vigorously” defend itself against the claims.

“Banks have an obligation to their shareholders and the financial system to collect in full all amounts that are due and owing to them,” Carter said in its filing. “As with all customers, the Justice entities have an obligation to repay all amounts due and owing in a full and timely manner as agreed upon in the various loan documents governing their loans.”

Carter said it believes the loans are fully secured, including collateral such as The Greenbrier Resort, and have personal guarantees from several family members.

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