Credit Suisse files long-awaited $440 million lawsuit against Softbank

By Jonathan Browning
 

Credit Suisse Group AG formally filed its long-awaited $440 million lawsuit against SoftBank Group Corp. stemming from the spectacular collapse of finance firm Greensill Capital. 
 

The Swiss lender sued SoftBank in London earlier this month, saying it planned to focus on “maximizing recovery” for investors in its supply chain finance funds. The suit marks the first legal move since the bank was rescued by Swiss rival UBS Group AG.

For Credit Suisse, the high-profile collapse of disgraced financier Lex Greensill’s supply chain business was one of several major scandals that knocked confidence in the lender, left clients with hundreds of millions of dollars of losses and ultimately led to its takeover.

 

Just days before the Swiss government orchestrated the UBS deal, regulators said Credit Suisse “seriously breached” its risk management requirements.

The implosion of Greensill Capital in March 2021 saw Credit Suisse freeze and wind down a $10 billion group of funds that the Swiss bank had marketed to clients as safe investments. The bank said that about $6.8 billion of the funds have since been returned to investors.

The London suit is set to consider the way that Greensill restructured its relationship with Katerra Inc., a US-based construction company in which SoftBank was a major investor. Credit Suisse alleges SoftBank concocted the restructuring so that it could pull its own money out, knowing full well that Greensill, already in free-fall, would be unable to repay the $440 million it owed to Credit Suisse.

Softbank said it would “vigorously” defend the claim.

“After more than two years of attempting to shift blame for its own poor investment decisions, Credit Suisse has finally brought a claim - but, as expected, it is entirely without merit,” a Softbank spokesperson said in a statement.

The two have engaged in a series of shadow legal skirmishes in the US and UK ahead of the filing of the claim. It’s almost a year and a half since Credit Suisse first sought documents from the company.