Bankruptcy

Troubled financial history

Cornett, a managing partner of West Virginia Great Barrel and the EDA’s point of contact, previously ran Cornett Hospitality LLC, a Virginia company that owned restaurants in Virginia, West Virginia and Pennsylvania.

In November 2012, that company filed Chapter 11 bankruptcy in U.S. Bankruptcy Court in the Eastern District of Virginia. It owed between 200 and 999 creditors somewhere between $1 million and $10 million, according to the filing.

Its largest creditors included Spirit Financial Acquisitions ($3 million), the Bank of Virginia ($1.38 million) and U.S. Foods Inc. ($490,861).

More than $8.5 million in claims were discharged without payment, according to a May 2016 filing that wrapped up the matter.

In October 2013, Cornett went on to file a personal bankruptcy in the same court. In that filing, he listed owing between one and 49 creditors anywhere between $10 million and $50 million.

While bankruptcies can absolve debtors from requirements to pay off their creditors, creditors can file adversarial complaints in bankruptcy court to object to the discharge of debt owed to them.

In October 2015, Judy A. Robbins, a U.S. trustee overseeing the case, filed an adversarial proceeding in Cornett’s personal bankruptcy case.

She alleged that 21 months before Cornett filed for personal bankruptcy, he deeded his 41.8 percent interest in Chesterfield Land, LLC — his employer at the the time of the filing — to his niece, valued at almost $215,000. He was already engaged in a dispute with his creditors and Cornett Hospitality’s creditors at the time.

Chesterfield Land was entitled to receive royalty payments at the time of the transfer from a landfill, and owned real estate located at The Greenbrier resort with an approximate value of $2.25 million.

Chesterfield Land acquired the property from Cornett in 2010.

Though Gov. Jim Justice was president of The Greenbrier resort at the time, his spokesman said in a statement the two had not met until the EDA press conference announcing the new jobs. Justice was elected to office last year.

“While I met the gentleman and shook his hand at the press conference, I do not know him and do not have a relationship with him,” Justice said in a statement.

The trustee’s suit alleges that, despite gifting the asset, Cornett continued to operate its accounts.

“After the January 2012 transfer of the defendant’s interest in Chesterfield Land, the defendant continued to control it and use it to fund his lifestyle,” the suit states. “He continued to transfer substantial funds from the bank account of Chesterfield Land into his personal bank account.”