Greensill Capital’s U.S. arm files Chapter 11 bankruptcy in New York

By Sarah Lizee

Olympia, Wash., March 26 – Greensill Capital Inc. filed Chapter 11 bankruptcy Thursday in the U.S. Bankruptcy Court for the Southern District of New York following parent company Greensill Capital Management UK Ltd.’s insolvency proceedings in the United Kingdom.

Matthew Tocks, head of restructuring for the company, said in a declaration that in early 2021, the company experienced severe financial distress as a result of a series of factors.

These included a combination of the expiration of a key insurance policy of the parent company, which resulted in the loss of significant insurance coverage for the company’s newly originated assets; the withdrawal of substantial financial support from some of the company’s key creditors; and pressure on and from key investors of the company to reduce its exposure to its largest client, GFG Alliance, Tocks said.

“These events together precipitated the cessation of GCUK operations and left the company in a position of increased financial instability,” Tocks said in a declaration.

By an order of the English High Court dated March 8, administrators were appointed to both Greensill Capital Management and Greensill Capital UK Ltd.

Prior to the administration proceedings, Greensill Capital Management and Greensill Capital UK undertook contingency planning in relation to a potential sale of the Greensill Capital’s business and some of its assets.

In February, Greensill Capital received an indicative proposal from investment funds managed by Apollo Global Management, Inc., including Athene Holding Ltd. and Athora Holding Ltd. The parties entered into an exclusivity agreement on March 2, but the negotiations were ultimately unsuccessful.

Following the administrators’ move toward liquidating the company, on March 17, Greensill Capital terminated substantially all of its employees in the United States other than the employees needed to administer the Chapter 11 case, pursue a sale transaction and wind up the estate.

“The events affecting the company in Europe made the filing of this Chapter 11 case unavoidable,” Tocks said.

“Here, the purpose of filing the petition with this court is to best insulate the debtor from the distress affecting the company elsewhere in the world. The debtor has valuable assets that are worth preserving and can be sold for the benefit of its creditors and shareholder.”

In order to fund the Chapter 11 case, Peter Greensill Family Trust has agreed to provide the debtor with $2 million of debtor-in-possession financing.

The company is seeking interim access to $1.5 million of the facility.

The facility will have a term of 365 days. Interest will be 5% per annum for the first 60 days after the initial borrowing date and 20% for any period of time that a loan is outstanding after 60 days.

In its petition, the company listed $10 million to $50 million in assets and $50 million to $100 million in liabilities.

No unsecured creditors were listed with claims of $1 million or more.

New York-based Greensill Capital is the U.S. arm of Greensill Capital Management, a financial services company. The Chapter 11 case number is 21-10561.

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