Greensill Bank AG’s administrators are seeking more than $400 million from Zurich Insurance Plc in London lawsuits to recoup the defunct lender’s losses on controversial investments linked to Credit Suisse and Liberty Commodities Ltd..
(Bloomberg) — Greensill Bank AG’s administrators are seeking more than $400 million from Zurich Insurance Plc in London lawsuits to recoup the defunct lender’s losses on controversial investments linked to Credit Suisse and Liberty Commodities Ltd..
The administrators want Zurich to make good losses of about $274 million incurred on debt the bank acquired from a Credit Suisse subsidiary as well as about $127 million for non-payments by beleaguered commodities tycoon Sanjeev Gupta’s Liberty Commodities, according to details of the March claims only recently made public.
The losses on Credit Suisse debt add to the sums Greensill sought from the insurer for losses related to Liberty, which were first reported by the Financial Times on Tuesday. On Monday, a UK court allowed Greensill more time to serve the claims to the insurer.
Gupta’s steel firm had agreed to restructuring deals with the two lenders agreeing to make repayments through a combination of lump sums and scheduled installments. “Liberty is making good progress restructuring across its global operations,” Liberty Steel’s spokesperson said in an emailed statement. Liberty signed a full debt restructuring agreement with the Greensill Bank’s administrators in April, according to the statement.
Citing insurance agreements to which Credit Suisse was a party, Greensill said Zurich must make the payment for insured losses either to Credit Suisse directly or to Greensill.
Zurich “believes that it has meritorious defenses to the policy and the claims raised and will vigorously contest the action,” the insurer said in an emailed statement.
The lawsuits against the insurer comes on the heels of a London suit by Credit Suisse in November against the German bank and its administrator over the lost funds.
In that case, Credit Suisse argued that any insurance proceeds for losses on the notes of Credit Suisse subsidiary’s must be paid directly to the firm — since been taken over by UBS Group AG after its own financial woes.
Spokespeople for Greensill’s administrator declined to comment on the case. Emails to Credit Suisse and UBS were unanswered.
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