A chapter 11 trustee representing a Tri-State area coal entrepreneur has filed suit against an Ohio-based bank and an affiliated insurance agency alleging the bank withheld information about the true value of the companies in an alleged effort to bamboozle him into a financial agreement that bankrupted the producer, the Huntington (W. Va.) Herald-Dispatch reported today. On behalf of Dennis Ray Johnson II, the former owner of nine coal companies, the trustee filed a federal lawsuit in the Southern District of West Virginia against Peoples Bank, Peoples Insurance Agency, Great American Insurance Company of New York and bankruptcy receiver Zachary B. Burkons. Johnson's companies, which were based in West Virginia and Kentucky, included DJWV, Southern Marine Services, Southern Marine Terminal, Redbud Dock, Green Coal, Appalachian Mining & Reclamation, Producer's Land, Producer's Coal and Joint Venture Development. Trustee Thomas Fluharty alleges through a long-standing relationship between Johnson and a former Peoples Bank employee, the bank convinced the coal group to enter into a forbearance agreement in 2015 to prevent foreclosure. The bank and Johnson had started their loan relationship in 2011, which resulted in about $19 million of loans.
