Marsh McLennan Settles High-Profile Lawsuit
Marsh McLennan, the world’s largest insurance broker, has reached a settlement in a high-profile lawsuit brought by US private debt firm White Oak. The lawsuit, which was filed in London’s High Court, alleged that Marsh made “fraudulent misrepresentations” about insurance covering invoice-backed financial products sold by failed financing firm Greensill Capital.
White Oak had been seeking $143 million in damages, claiming that Marsh assured them that crucial insurance policies were still in force even after the broker had learned that a key insurer had threatened to cancel its policy. The settlement amount was not disclosed.
The lawsuit brought to light embarrassing exchanges between Marsh executives discussing the escalating financial crisis surrounding Greensill Capital. In one email exchange from 2020, a Marsh executive described the situation as “a frightening absence of corporate governance: this is fraud which may well be in breach of the Australian legal code as it applies to insurance companies”.
Greensill Capital collapsed in March 2021, causing a significant financial scandal that resulted in billions of dollars in losses for investors such as Credit Suisse. The collapse was largely attributed to the loss of a key insurance contract.
The settlement comes after a trial began earlier this month, with some of Marsh’s senior executives testifying under oath about their dealings with Lex Greensill, the company’s now-disgraced founder. A judgment in the case was not expected for several months.
Marsh stated: “We have reached a confidential settlement and are pleased that this matter has been resolved.” White Oak confirmed the settlement, adding that they will continue to pursue other parties to recover additional amounts and maximize returns to investors.
This lawsuit is part of a larger litigation related to Greensill Capital’s collapse, with cases ongoing in the UK, Australia, and Germany. Other investors are also pursuing lawsuits against Insurance Australia Group and Tokio Marine, the former owners of Bond & Credit Co, for refusing to pay out on insurance contracts.
