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TheStreet Open House

Billionaire's Coal Struggles Irking Biz Owners

An Associated Press review of court records found that since the beginning of 2012, there have been at least five lawsuits â¿¿ one in federal court â¿¿ that seek unpaid bills in the three Kentucky counties where Justice has mining operations. Two more actions in Tennessee federal court and two in Wise County, Va., filed since August of 2011 also sought unpaid bills or debts owed as part of a contract. Four of those nine legal claims, which in total exceed $1 million in alleged debts, have been settled for undisclosed amounts.

Aside from those debt claims, a handful of other pending suits seek to settle disputes over Justice's acquisition of mining lands in Kentucky and elsewhere.

Miracle and other business owners in southeastern Kentucky said when they made efforts to collect what they were owed by contacting the Justice company's home office in Roanoke, Va., they were repeatedly delayed. Miracle, who sells specialized mining equipment and employs five people, said the debts prevented him from replenishing his inventory, harming future sales. He said his attorney is in the process of filing a lawsuit.

"When you do business with a billionaire, you think you are going to get paid," said Lee Kersey, owner of M&D Electrical Supply in Hazard. Kersey said Justice's companies owe him about $240,000 for work dating back to January 2012, but he has not filed a suit. Kersey, who has about eight employees, said he received a check for $28,000 in February.

Timothy Bates, a lawyer in Hindman, Ky., sued Justice subsidiary Kentucky Fuel Corporation last year for about $16,000. His client, who did some excavating work, received payment after the suit was filed.

Referring to the other lawsuits, Bates said: "There's definitely a pattern, I'll say that."

Justice said he isn't deeply involved in the day-to-day operations of his coal companies, and complaints about debts have reached him "on a limited basis." But he said he can "absolutely promise" that outstanding debts will be paid.

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