A group of ex-Greensill Capital employees sued the defunct firm in London, accusing management of unfairly keeping them in the dark about the company’s “imminent danger of collapse.”
A group of 277 employees — less than half the UK workforce — are claiming £4.5 million ($5.4 million) for not being consulted properly on their redundancy. They say the firm did not tell them about potential job-loss risks despite being aware of its obvious financial problems. A judge will decide Thursday whether the claimants are entitled to that level of award.
The London-based supply chain financing company imploded in March 2021 after Credit Suisse froze the $10 billion group of funds that Greensill effectively ran. The Swiss bank decided to liquidate the funds after Greensill failed to obtain insurance coverage for some of the loans.
The claimants allege they were first told by chief executive officer Lex Greensill late on a March 8 Zoom call that the business was going into administration. He said on the call that administrators Grant Thornton would be working toward completing a sale of part of the business to another firm, according to court documents.
“Thank you it has been an absolute privilege and I very much hope that each of you achieve everything in life that you wish and you look back on your experience here in this family with fond memories,” Greensill said, according to a transcript of the call.
Four days later, Grant Thornton organized a second afternoon call that told them the firm planned to fire as many as 460 employees with immediate effect.
Greensill’s collapse has sparked a number of inquiries and investigations in several countries. The firm, with the backing of SoftBank Group Corp. and General Atlantic LLC, went from a small startup to a tech unicorn with an estimated $7 billion valuation at one point. David Cameron, the former UK Prime minister, was an adviser to the firm and has faced criticism for his well-paid role at the company.
Lawyers for Greensill’s administrators said that they did make efforts to keep employees informed. “In the best interests of the creditors the administrators had no option but to make the employees redundant and they only had a matter of days in which to do so,” according to court documents.
The lawyers claim that when the company was put into administration it was anticipated that a potential sale to Apollo Global Management Inc. would go ahead and no redundancies would have happened.
The UK government’s business department has been brought in as a second party in the case. If Greensill is unable to pay, the claimants will seek a capped award of around £2 million.
–With assistance from Lucca de Paoli.
- Greensill Capital Still Has $9.3B to Pay on Its Notes After Its Collapse a Year Ago
- Credit Suisse Warns Greensill Litigation Against Insurers, Debtors May Take 5 Years
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