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March 4, 2022

Credit Suisse lodges lawsuit against Australia’s IAG over Greensill collapse

Credit Suisse has filed a lawsuit against Insurance Australia Group (IAG) in connection with the collapse of Greensill Capital, reported Reuters.

The lawsuit, filed alongside Greensill creditors, seeks compensation from Australia’s largest insurer over the collapse of the supply chain finance firm.

IAG’s former unit BCC Trade Credit sold policies to Greensill and was earlier named as potentially exposed to its failure last year.

At the time, the insurer denied liability, pointing out it had divested shares of BCC two years ago. 

According to court filings, lawsuits were filed against IAG by Greensill’s administrator and White Oak Global Advisors, which represents Greensill client GFG Alliance, in late 2021.

Two suits were filed by Credit Suisse last month against the insurer.

The Swiss private bank attended an administrative hearing in the Federal Court as part of the compiled lawsuits seeking $219m (A$300m) in compensation, the report said citing regional publications.

White Oak and Credit Suisse did not comment on the news.

A spokesperson for IAG told Reuters that the company continue to believe it was not liable for BCC’s policies.

IAG expected ‘potential litigation by the administrators of Greensill or other claimants’ and would press against the lawsuits, the person said.

Credit Suisse was caught in a tight spot after it suspended $10bn of supply chain funds to Greensilljust before the latter became insolvent.

The investigation following the collapse resulted in Credit Suisse dismissing some of its employees and splitting its asset management unit from international wealth management arm.

Credit Suisse headquarters was also searched by the Swiss police in connection with the fund scandal.

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