Credit Suisse Launches Legal Action against Softbank
Credit Suisse has filed a petition with the Uk High Court to initiate formal legal proceedings against SoftBank over a $440 million dispute, City A.M. said. Credit Suisse is stepping up its legal battle against Japanese investment giant SoftBank to offset losses related to the collapse of supply chain finance firm Greensill Capital. Aug 11 (Reuters) – Credit Suisse (CSGN. S) has asked the English High Court to initiate formal legal proceedings against Japan`s SoftBank Group Corp (9984.T) in a $440 million dispute over funds linked to Greensill, two sources familiar with the matter said Thursday. 24. DECEMBER (Reuters) – Credit Suisse is asking U.S. courts for information that could lead it to take legal action in the U.K. against SoftBank Group Corp to recover funds it says it owes to its Greensill-related supply chain finance funds, according to U.S. court documents.
In June, a California judge gave Credit Suisse an August 12 deadline to indicate that it was indeed serious about a lawsuit in the United States. And here we are. Last week, Credit Suisse lawyers asked a high court in England for permission to initiate formal legal proceedings against Japanese bank Softbank, according to a Financial Times article (behind Paywall) citing three people with knowledge of the case. Credit Suisse is warming up legal pressure on Softbank to recover hundreds of millions of dollars from the Greensill debacle. Late last year, the bank filed a petition in the U.S. for information that it said would support a lawsuit it wanted to bring against SoftBank and other subsidiaries in England over the money it said was owed by Katerra. “The documents requesting the subpoena are relevant to an expected legal proceeding in England against potentially other parties, SoftBank Group Corp. and some of its subsidiaries, including SoftBank Vision Fund LP, SoftBank Vision Fund II-2 LP, SVF Abode (Cayman) Limited, SVF II Abode (Cayman) Limited and SVF Habitat (Cayman) Limited,” the bank`s lawyers said in the filings. According to the Financial Times report, Credit Suisse had to seek the approval of a British judge to initiate legal proceedings against Softbank because the clients` money was lent by Greensill and not by the bank.
A decision on the continuation of the case will only be taken in a few months. In a motion filed Thursday in U.S. federal court in San Francisco, Credit Suisse is seeking information that it would support a lawsuit it plans to file more than $440 million against SoftBank and other subsidiaries in the U.K., which Katerra says is due to them. However, SoftBank on Thursday rejected the decision to take legal action in England as a “desperate attempt to blame SoftBank for its own bad investment decisions”. The Financial Times first reported the move on Thursday. A logo is displayed on Credit Suisse Bank in Geneva, Switzerland, on June 9, 2022. REUTERS/Denis Balibouse Switzerland`s second-largest bank is trying to win back funds from clients that Greensill Capital, a defunct financial firm, lent to Katerra, a U.S. construction group backed by SoftBank that filed for bankruptcy last year. The Swiss bank is trying to find out what SoftBank executives, including chairman and CEO Masayoshi Son, knew about Katerra`s restructuring plans. “We strongly reject any erroneous suggestion that a SoftBank company ever intended or intended to harm the interests of Credit Suisse or its funds, and we will vigorously defend any claim in this matter if a claim was actually made,” a SoftBank representative said in a statement. Credit Suisse will buy back up to 3 billion Swiss francs ($3 billion) of debt, an attempt by the Swiss bank to demonstrate its financial strength and reassure investors worried about the lender`s overhaul and cost.
The bank filed a petition with the US last year to gather information that it would support a lawsuit it wanted to launch in the UK. The bank is reportedly trying to determine whether SoftBank bosses were aware of Koterra`s restructuring plans. The Swiss bank focused on about $2.3 billion in loans that Greensill, which imploded in March, issued to three counterparties, including Katerra, backed by SoftBank, which suffered late payments. The troubled Swiss lender, which faced a series of crises last year, is trying to recover funds borrowed by Greensill from a now-defunct financial firm Katerra backed by SoftBank. Credit Suisse (CSGN. S) declined to comment, while SoftBank (9984.T) did not immediately respond to a request for comment. Softbank`s lawyers, for their part, said Credit Suisse`s efforts to obtain information about the courts in the United States were a “fishing expedition.” They argue that the bank does not seriously intend to initiate proceedings in London, but rather is trying to divert attention from the bad investment decisions it has made. Credit Suisse is the first Swiss bank to be convicted by Swiss courts Credit Suisse on Thursday filed a prior investigation under Article 1782 to obtain documents and communications exchanged between SoftBank and Katerra. This law allows foreign parties to apply to U.S. courts for evidence of use in proceedings.
Credit Suisse has been rocked by a series of crises over the past two years after the implosion of US investment firm Archegos Capital led to a $5.5 billion coup before being forced to close funds linked to green funds. The bank says SoftBank was aware of a restructuring of Katerra in 2020 that effectively put the assets of Credit Suisse investors out of reach, according to court documents filed in the U.S. in 2021. SoftBank`s logo will be displayed at a press conference in Tokyo, Japan, on February 4, 2021. REUTERS/Kim Kyung-Hoon Switzerland`s second-largest bank is working to recover funds after some $10 billion of funds linked to insolvent supply chain finance firm Greensill collapsed. In June last year, Credit Suisse was forced to close several supply chain financing funds after greensill`s implosion, trapping $10 billion of Credit Suisse client funds. The Swiss bank is still trying to recover $2.5 billion in a lawsuit that could take five years and cost $291 million, Credit Suisse said. Greensill`s implosion caused the collapse of some $10 billion of Credit Suisse funds linked to the company, which Credit Suisse has since sought to recapture. Our Standards: Thomson Reuters` Principles of Trust. Greensill Capital lent about $440 million in Credit Suisse client funds to a U.S. construction company that filed for bankruptcy with more than $1 billion in liabilities. According to the FT, the US company Katerra was backed by Softbank`s $100 billion Vision Fund.
SoftBank did not respond to City A.M.`s request for comment, but said in a statement to the Financial Times that Credit Suisse`s decision was a “necessary procedural step to prolong its desperate attempt to blame SoftBank for its own bad investment decisions.” Stay abreast of important business, financial and political developments around the world. Stay up-to-date and identify emerging risks and opportunities with independent global reports, expert feedback, and reliable analysis. The move is part of the bank`s attempt to save funds in arrears from the collapse of about $10 billion in client funds linked to Greensill Capital, the supply chain finance firm of financier Lex Greensill, which imploded last year. Credit Suisse declined to comment. The Financial Times first reported the news. Koerner was first recruited into the company to replace Eric Varvel as head of asset management, who was ousted by Credit Suisse after the Greensill scandal. Managing Director Thomas Gottstein left the company at the end of July after three consecutive quarters of losses, Ulrich Koerner took over the management. In 2020, Softbank agreed to inject money into Greensill, which lent Katerra funds originally borrowed from Credit Suisse clients. Greensill agreed to cancel Katerra`s debt for a stake in the company, which filed for bankruptcy in June last year.
In the US court cases, the Swiss bank claims that Softbank carried out a financial restructuring of Katerra in its favour at the expense of Credit Suisse.