West Virginia governor accuses Greensill of ‘fraud’ in lawsuit

Posted by

[ad_1]

The governor of West Virginia has filed a lawsuit against Greensill Capital and its founder, alleging that the now collapsed financing firm “perpetrated a continuous and profitable fraud” against his mining company.

Jim Justice, a 69-year-old businessman and Republican politician, has launched legal action against Greensill in Manhattan federal court, alleging his coal mining empire is under threat due to its “sudden and unjustified abandonment” by the financing firm.

Justice’s Bluestone Resources and its related companies have been one of Greensill’s biggest clients in recent years. Greensill specialised in arranging corporate funding linked to invoices and fell into administration last week.

Bluestone is the first Greensill client to take legal action. Greensill’s own lawyers argued in an Australian court earlier this month that its collapse could put 50,000 jobs around the world at risk, because some of its clients were “likely to become insolvent” without further financing.

The suit, filed by Bluestone’s lawyers Sullivan & Cromwell in the Southern District of New York on Monday, says that the London-based finance firm advanced $850m of financing to Bluestone. In return, the coal miner paid $108m in cash and an additional $100m in equity warrants, giving Greensill the option to take a stake in Justice’s business.

In the filing, Bluestone claims that in recent negotiations over its financing with Greensill, the company “engaged in a pattern of material misrepresentations” about its “own increasingly perilous financial condition”. The suit says that the financing firm indicated that it “remained a stable and committed financing partner for the long-term”, arguing that if Bluestone had been aware of its true condition it would have “immediately sought alternative financing”.

The lawsuit names founder Lex Greensill and former vice-chairman Roland Hartley-Urquhart as defendants.

Greensill’s administrators Grant Thornton declined to comment. Greensill and Hartley-Urquhart did not respond to requests for comment.

[ad_2]

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *