CHARLESTON — The company going after a helicopter owned by Gov. Jim Justice’s family coal operation wants to know why it isn’t where it’s supposed to be and why it shouldn’t be entitled to take possession.
Caroleng Investments Limited, parent company to the Russian mining company Mechel that bought and sold properties with Justice, is seeking the seizure over a debt now amounting to about $13 million already recognized and awarded in the federal court system.
U.S. marshals were directed in a federal court filing last Thursday to move toward getting the helicopter at the Roanoke-Blacksburg Regional Airport in Virginia.
Bluestone Resources, the Justice family coal company, filed a motion the next day to halt the seizure.
“At the same time, as if to underscore Bluestone’s bad faith, the Judgment Debtor has removed the Helicopter from this district, flying it to Burlington, North Carolina, presumably to hide it from the United States Marshal Service, frustrating the enforcement of the writ,” wrote lawyers for Caroleng.
The helicopter’s movement was also described in an affidavit filed as companion documentation by a Caroleng lawyer.
“On October 5, 2023, I was able to track the location of the helicopter through the website www.flightaware.com, which showed that the aircraft was taken to Burlington, North Carolina,” wrote Caroleng attorney Zachary Mazur. “The following day, Bluestone filed its motion.”
Caroleng is asking the court to order Bluestone to comply and turn over the helicopter to the marshal service.
Bluestone has objected to the helicopter seizure by a company “controlled by a Russian oligarch.” Bluestone’s lawyers say that if the helicopter is seized and liquidated then the money should instead go to different lenders higher up the food chain.
Caroleng filed a response to those claims Tuesday.
“It is not true that Caroleng is ‘an off-shore shell company created and controlled by a Russian oligarch,” the company’s filing states, instead characterizing Caroleng as a special purpose investment vehicle created to invest in West Virginia mining interests.
“Bluestone is a company that is widely thought to be controlled by the Governor of West Virginia, Jim Justice II. Media reports indicate that it has a long list of unpaid creditors. The Justice family is no stranger to ‘shell companies’ — public filings indicate they have created dozens, if not hundreds, of such entities, likely to thwart collection efforts by creditors such as Caroleng.”
Justice sold the family’s coal assets to Mechel in May 2009 for $436 million in cash and 83.3 million preferred shares of Mechel stock. Justice then bought Bluestone back in 2015 for $5 million.
The mines had closed under Mechel, but Justice reopened them.
The deal to buy back the Bluestone properties included a provision to pay Caroleng $3 a ton in royalty payments for mined coal, along with defined portions of future sales. In court filings, Caroleng claimed Bluestone withheld the royalty payments.
A three-person panel for the International Chamber of Commerce arbitrated the case in Paris, France, in October 2019, two years into Justice’s first term as governor. The panel awarded $8.4 million plus pre-award interest of $1.7 million after concluding Bluestone had “materially breached” multiple aspects of the agreement with Mechel. Additional interest has been piling up.
Caroleng, on behalf of Mechel, is now acting on a 2021 federal court order to enforce the arbitration award.
Bluestone, in its filing last week, contends it owes even more money to secured creditors, including about $800 million in liability that originated through loans from the international Greensill Capital that went belly up. The other lender, 1st Source Bank, is described as holding about $5 million in secured interests.
Caroleng pushed back that there’s no evidence offered that the Greensill debt is secured specifically to the helicopter. Moreover, Caroleng counters that Bluestone can’t speak for the lenders; if they have a claim on the helicopter then they should represent themselves.
Bluestone can’t even prove it would be harmed by losing the helicopter, Caroleng contends.
“Indeed, helicopters are not essential equipment for mining companies, and private air travel is generally considered a luxury,” wrote lawyers for Caroleng. “Without a helicopter, surely Bluestone executives can travel using alternatives.”