Investors claim that the brokerage firm failed to take adequate precautions.
White Oak Commercial Finance Europe, a UK-based lending platform, has started court proceedings in London against Marsh, the commercial insurance broker for the failed company Greensill Capital.
According to the Financial Times, White Oak received US$143 million in receivables from the now-insolvent supply chain finance firm between December 2020 and February 2021, unaware of Greensill’s insurance problems.
Greensill was insured by The Bond & Credit Co. (BCC), which informed the company and its broker in 2020 that BCC will not be renewing, increasing limits, extending, or underwriting new policies for Greensill due to various concerns.
White Oak accuses Marsh in its lawsuit of failing to take reasonable precautions to assure accurate representations, particularly about Greensill’s trade credit insurance or lack thereof.
Before being acquired by Tokio Marine in 2019, BCC was partially owned by Insurance Australia Group (IAG). In 2021, White Oak sued IAG in the intention of recovering payment for the receivables. A cross claim was filed earlier this year, according to records.
Meanwhile, Marsh has yet to respond to White Oak’s legal action against the brokerage.
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