Justice Energy Co Inc. has failed to pay the sanctions and has not responded to requests for financial information from the U.S. District Court for the Southern District of West Virginia, according to a filing from U.S. Attorney Michael Stuart. Stuart recently asked the court for permission to depose employees and representatives of Justice Energy and compel the company to produce financial information that might help his office locate potential assets to satisfy the civil contempt sanction.
"Based on my conversation with [the company's counsel] there was some suggestion that Justice Energy Company, Inc., may not have the financial resources to pay the sanctions imposed by the court," Stuart wrote in a Nov. 28 letter to Justice Energy requesting a financial statement.
Justice Energy attorneys told the court in a Dec. 21 status update that the company is examining available funds and assets and is gathering information to provide to the U.S. attorney's office. In the interim, they added, they provided consolidated balance sheets and income statements for Justice Energy for 2016 and 2017 and said they would provide the 2018 information when it becomes available.
The district court imposed sanctions on the company in 2016 after it failed to make payments to James River Equipment Virginia LLC to settle a debt and did not respond to a court order. Justice Energy in 2014 had agreed to pay James River Equipment six monthly installments of $30,000.
After receiving the fine, Justice Energy appealed the ruling to the U.S. Court of Appeals for the Fourth Circuit, but that court upheld the lower court's motion. The company appealed because it said the debt was incurred under previous company ownership. In 2015, Justice's family bought the company back from Mechel OAO after selling the operations to the Russian company at a much higher price in 2009.
In a 2016 filing, the company said it does not take federal court orders lightly and does not disregard or disobey such orders. At the time, the company said it had not been aware of the order imposed on the company until a reporter requested comment during Jim Justice's campaign for governor.
The judge in the case said the court was "loath to excuse a sophisticated corporate entity from judgment based solely on a claim that an employee failed to properly perform his duties."
A recent review of court documents conducted by Ohio Valley ReSource, a regional journalism collaborative supported by the Corporation for Public Broadcasting, found at least five cases in which Justice family companies failed to pay suppliers for goods or services, even after they were compelled by courts to do so. The James River Equipment suit was one of those cases. In some instances, Ohio Valley ReSource reported, U.S. Marshals authorized to seize assets from the Justice family companies' bank accounts found the accounts empty or closed.
Justice family coal companies have been involved in numerous instances of allegations of failing to pay taxes or other debts to both private and government entities. A request for comment sent to the governor's office and attorneys representing Justice Energy was not immediately returned.