Credit Suisse Group AG ’s effort to recover $10 billion invested in loans from Greensill Capital faces roadblocks because of a complicated structure that makes it difficult for the parties to agree on who owns the loans, according to people familiar with the matter.
A “double trust” structure means that investors in Credit Suisse’s funds have rights to cash flows from the loans held in one trust, but rights to the underlying loans are held in a separate trust, people familiar with the trusts say. These include loans to Greensill’s biggest borrower, GFG Alliance, the metals empire controlled by British-Indian tycoon Sanjeev Gupta.
Well, if this is actually a problem then it’s seriously bad banking. Who actually owns the cash or the debt being rather an important part of making a loan, no?