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Court date set for Greensill action against IAG

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The Federal Court has scheduled an initial hearing for a Greensill action filed last week against IAG over a $US35 million ($49 million) trade credit insurance claim.

The first case management hearing will be held in Sydney on February 2 and will be presided over by Chief Justice James Allsop.

Michael Frege in his capacity as insolvency administrator for Greensill Bank AG filed documents seeking an order that IAG is liable to cover the claim under a policy taken out through underwriting agency BCC Trade Credit.

Documents are yet to be lodged in response to the Federal Court filing, but it is expected IAG will defend the action.

IAG previously owned 50% of BCC, but sold its holding to Tokio Marine Management (Australasia) on April 9 2019 and has previously advised the market that it has no net insurance exposure on Greensill trade credit policies.

Supply chain finance group Greensill failed in last-minute NSW Supreme Court action on March 1 to avert the expiry of trade credit insurance policies that had provided around $US4.6 billion ($6.4 billion) in cover, with insolvency administrators subsequently appointed.

Dr Frege was appointed to the German-based Greensill Bank, while Grant Thornton administrators have been appointed for Greensill Capital.

“Based on various factors, including the determination of policy validity, reinsurance arrangements and the agreements with Tokio Marine, IAG remains confident that for any trade credit claims it may ultimately be liable to pay, it has no net insurance exposure,” the insurer said in its full-year Investor Report.

The Federal Court action filed last week relates to Greensill transactions involving Dubai-based Emirates Hospitals Group.