Greensill, the cause of so many headaches for Credit Suisse, is now being sued by hundreds of its former employees for wrongful dismissal.
A group of 277 former Greensill employees, under half of the firm's former workforce, have sued the insolvent British-Australian financial firm, seeking 4.5 million pounds (5.4 million) in compensation, «Bloomberg» reported (behind paywall) on Thursday.
The plaintiffs' lawyers argue that they were not made aware that the firm was facing an «imminent danger of collapse» and that their jobs were at risk.
Informed via Zoom
According to court documents, the company's CEO, Australian Lex Greensill, informed employees of the company's insolvency via a Zoom call on the evening of March 8, 2021. According to the statement, he said that Grant Thornton, the insolvency administrator appointed by business partner Credit Suisse, would work to complete the sale of part of the company to another firm, according to court documents.
Four days later, Grant Thornton said in another call that up to 460 employees were to be laid off with immediate effect. Attorneys for the bankruptcy trustee argued that time was of the essence and that they made every effort to inform employees. «In the best interests of the creditors the administrators had no option but to make the employees redundant and they only had a matter of days in which to do so,» according to court documents.
Possible Sale to Apollo
Furthermore, the lawyers claim that at the time of the insolvency, it was assumed that a potential sale to US financial investor Apollo Global Management would materialize, resulting in no layoffs at all.
The London-based supply chain finance firm collapsed in March 2021 after Credit Suisse froze the $10 billion fund group led by Greensill, taking the measure after Greensill failed to secure insurance coverage for some of the loans.
Taxpayers Footing the Bill?
A London judge will decide later today whether to allow the lawsuit to proceed, according to «Bloomberg». But even if the case is not allowed to go proceed and Greensill proves unable to compensate the employees, the British state will be held liable by the plaintiffs. In that case, they will seek an amount capped at 2 million pounds ($2.4 million).
