Greensill Capital sued in US as miner claims finance fraud
Greensill Capital was sued by a company that mines coal in West Virginia, in what may be the first US lawsuit since the firm was forced into insolvency.
Greensill’s collapse presents “a clear and present threat” to the business of Bluestone Resources, the mining company said in a complaint filed Monday night in Manhattan federal court. Bluestone claims it was defrauded by Greensill in an $850-million financing deal.
London-based Greensill was left fighting for survival this month as investors cut ties over worries about the creditworthiness of its borrowers, and Credit Suisse Group AG moved to wind down a $10-billion group of supply chain finance funds linked to financier Lex Greensill over valuation concerns.
Bluestone said it entered into a long-term financing agreement in which Greensill advanced $850-million. About $108-million of that was paid back in fees, according to Bluestone. Greensill also received warrants entitling it to at least $100-million.
Bluestone claims it was lulled by Greensill into increasing its dependency on the firm while Greensill remained silent about its fraudulent activities elsewhere. Greensill’s insolvency threatens Bluestone’s ability to do business, it said. The company is seeking unspecified damages.
“Greensill Capital’s sudden and unjustified abandonment of Bluestone, together with all of the press surrounding Greensill Capital’s fall, now present a clear and present threat to Bluestone’s business,” according to the lawsuit. “Defendants are responsible for all damages to plaintiffs caused as a result of their egregious actions.”
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