Greensill Capital lender Credit Suisse recently held pitches for a financial advisor, with FTI Consulting in the pole position to nab the mandate, according to two sources familiar with the situation. The UK-based financing company last month filed for insolvency protection, wreaking havoc with the Swiss bank.
The beauty pageant comes as Greensill is entangled in a controversy related to a financing arrangement with coal company Bluestone Resources.
The UK firm provided Bluestone with USD 850m in financing under an arrangement that would have the coal maker repay Greensill through future collections of receivables. But Greensill’s insolvency proceeding now threatens Bluestone’s financial health.
The coal company, which is owned by West Virginia Governor Jim Justice, filed a lawsuit in March for fraud and contractual breaches against Greensill. The suit alleges that Greensill “perpetrated a continuous and profitable fraud,” according to court documents.
“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,” the complaint said.
The US lawsuit comes as Greensill faces administration proceedings in the UK and Australia, finding itself facing insolvency after Credit Suisse accelerated the firm’s obligations under a USD 140m term loan. The Swiss bank has had to close around USD 10bn of supply-chain finance funds that bought Greensill’s notes, according to press reports.
Bluestone, represented by Sullivan & Cromwell, alleges in the suit that, in the wake of Greensill’s downfall, the coal company has been effectively left on its own after entering what it believed would be a long-term relationship with Greensill.
Credit Suisse declined to comment. FTI did not respond to a request for comment.