Greensill Capital gets confirmation of Chapter 11 liquidation plan

By Sarah Lizee

Olympia, Wash., Oct. 26 – Greensill Capital Inc. received confirmation of its Chapter 11 plan of liquidation, according to an order filed Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

The plan is centered on the sale of the debtor's 100% ownership interest in Finacity Corp. to White Oak Global Advisors, LLC and a global settlement.

Following the close of the Finacity sale, the debtor has liquidated its primary tangible asset, and its remaining assets consist almost entirely of potential causes of action.

The plan contemplates payment in full of priority wage claims and the funding of the liquidation trust with the remaining sale proceeds and cash on hand to pursue over $65 million in retained causes of action.

The plan ensures that the liquidation trust will be funded with an initial minimum reserve of $250,000 to ensure the liquidation trustee can effectively pursue the retained causes of action for the benefit of beneficiaries of the liquidation trust.

The company said it anticipates that the liquidation trust will make periodic distributions to beneficiaries of the liquidation trust in the event the liquidation trustee is able to successfully pursue the retained causes of action.

The global settlement is between the debtor, the official committee of unsecured creditors, and the Greensill Capital (UK) Ltd. (GCUK) and Greensill Capital Management (UK) Ltd. (GCMC) parties.

GCUK has agreed to subordinate its $52.84 million claim to general unsecured claims and receive only 20% of the liquidation trust net recovery until allowed general unsecured claims are paid in full, with such claims to receive the other 80% of the liquidation trust net recovery, and then 100% of the liquidation trust net recovery thereafter.

Any residual liquidation trust net recovery following full payment of the subordinated GCUK intercompany loan claim will be distributed to GCMC, the debtor’s sole shareholder.

Also, as part of the global settlement, GCUK has agreed to contribute to the debtor all of its legal, equitable, and beneficial rights relating to causes of action that it may hold arising from the 2019 acquisition.

Greensill said the GCUK claim contribution supports the liquidation trust’s pursuit of retained causes of action for the benefit of the debtor’s creditors.

The plan provides that all recoveries made from retained causes of action, including any settlement, effected prior to the effective date, will be allocated solely to payment of allowed general unsecured claims.

Secured tax claims, other priority claims, priority wage claims, and other secured claims will be paid in full.

New York-based Greensill Capital is the U.S. arm of Greensill Capital Management, a financial services company. Greensill Capital filed bankruptcy on March 25, 2021 under Chapter 11 case number 21-10561.

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