Credit Suisse – Greensill


Supply chain financier Greensill Capital filed for insolvency protection in March 2021. Investors in Greensill-related insured funds structured and promoted by Credit Suisse, many of whom believed they were investing in safe alternatives to cash and money market funds, may lose all or a substantial part of their investments.

Who is Greensill?

Greensill is a British financial services firm founded by Australian banker and businessman Lex Greensill. Greensill billed itself as a technology startup that competed with traditional banks in offering “supply chain financing”. Instead of keeping its customers’ payment obligations on its balance sheet like a traditional bank, Greensill Capital securitized them into bond-like instruments and sold them to financial services firms.

What went wrong and how investors in the insured Credit Suisse supply-chain funds were impacted

Supply chain finance is typically viewed as a safe investment because it simply relies on waiting for a company to pay for goods already received and, more importantly, because the underlying credit risk is typically covered by insurance. However, while Greensill initially practiced relatively straightforward supply chain financing, as it grew, it increasingly financed not only actual existing obligations from customers, but future invoices that it merely forecasted customers would seek financing for, referred to by Greensill as “future accounts receivable”.

During last summer, Greensill’s largest insurer (Tokio Marine) warned Greensill that its insurance coverage might at its own discretion not be renewed. In September of 2020, Tokio Marine notified Greensill definitively that its coverage would not be renewed 6 months later, on 1 March 2021. Greensill was unable to find a replacement for Tokio Marine and ultimately initiated a court action at the eleventh hour to force Tokio Marine to maintain coverage a few days before the policy would lapse. But the Supreme Court of New South Wales in Australia threw out the case, citing Tokio Marine’s advance warnings. When 1 March arrived and the insurance policies were not renewed, Credit Suisse determined that the funds should be gated, preventing its customers from withdrawing their investments.

Did Credit Suisse do anything wrong?

Credit Suisse arranged and promoted Greensill-related insured investment funds to yield-starved investors as safe instruments and as an alternative to money market funds because of their insured character. Credit Suisse was in addition the funds’ portfolio manager.

It is undisputed that investors were not informed during the summer 2020 that the main insurance company had pulled out and therefore that the funds would no longer be fully insured as from 1 March.

It remains unclear exactly when Credit Suisse became aware that Greensill’s insurance would not be renewed. Credit Suisse has claimed they only learned of Tokio Marine’s refusal to renew its policies in February 2021. But there are reports that at least as far back as summer of 2020, Credit Suisse was contemplating instituting a rule that would require Greensill to diversify insurance providers, which indicates that Credit Suisse had visibility into the status of Greensill’s insurance coverage. There may also be a difference between what Credit Suisse actually knew and what Credit Suisse should have known as promoter and portfolio manager of the Greensill-related insured funds.

Possible avenues of recoveries for the investors?

It remains unclear to what extent investors will be able to recover their investments and if and how the insurance policies will cover investments made by the fund prior to 1 March 2021.

At this stage of our investigation, our main question is the following: why did Credit Suisse continue to market this fund as a fully insured product and a low-risk and well diversified investment in light of the decision made by the insurance companies during the summer 2020 not to renew the insurance policies? We believe that once the main insurance company pulled out, the risk profile of the fund changed dramatically overnight from how it had been promoted by Credit Suisse previously. Investors were, however, not informed accordingly and in due time, and hence investors have a potential claim against Credit Suisse.

Furthermore, the risk factors mentioned in Credit Suisse’s prospectuses do not indicate that the insurance companies had the option, at their own discretion, to not renew their policies. If the insurance coverage was limited in time with possible roll-over at the discretion of the insurers, this should have been clearly delineated in the prospectuses as a separate risk factor so that investors would have been aware that the protection was relative and the product was not “fully insured”, as promoted by Credit Suisse.

Credit Suisse stated that it was only informed about the cancellation of the insurance policies in February 2021. This seems to be potentially either untrue or an indication of gross negligence, since Credit Suisse set up and managed the funds and was privy to Greensill’s finances, having lent Greensill USD 140 million in anticipation of an IPO advised by Credit Suisse.

In addition, the concentration of risks in certain counterparties and various related party transactions between Greensill, Softbank’s Vision Fund, steel magnate Sanjeev Gupta’s businesses and Credit Suisse require further clarification as it appears that the underlying receivables were less diversified than originally presented by Credit Suisse.

We are currently reviewing investors’ legal options to recoup the losses suffered.


If you would like to be kept informed about our initiatives, please contact Edouard Fremault (

Investors in Credit Suisse funds with Greensill exposure are invited to leave their contact details and one of our experts will be in touch. Leaving your contact details will also allow us to keep you informed about the status of our investigations and any actions that we will propose to affected investors.

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Company name

Credit Suisse – Greensill
United Kingdom 

Contact person

✉️ Edouard Fremault


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