Credit Suisse has started a significant lawsuit against Japan’s SoftBank Group, seeking $440 million in damages. The case began on Thursday in London and revolves around losses tied to Greensill Capital, a finance firm that recently collapsed. Lex Greensill, the founder of the now-defunct company, is expected to testify next week.
The lawsuit focuses on funds Greensill lent to Katerra, a U.S. construction company backed by SoftBank. Greensill’s fall has led to major financial losses for investors and has sparked various lawsuits and regulatory investigations. Credit Suisse had to shut down $10 billion in funds linked to Greensill, which contributed to a state-backed rescue of the Swiss bank by UBS Group in 2023.
UBS is now taking the lead in pursuing this case against SoftBank. Key figures in the trial include Lex Greensill and Eric Varvel, the former chairman of Credit Suisse’s investment bank. Credit Suisse claims that Greensill, acting on SoftBank’s instructions, relinquished rights to Katerra’s debts in exchange for shares, which were then transferred to a SoftBank entity. This left Credit Suisse facing significant losses related to the $440 million in notes.
Sonia Tolaney, the lawyer for the Credit Suisse fund holding the notes, argued that SoftBank had substantial exposure to both Greensill and Katerra, totaling around $3.5 billion. She stated that SoftBank needed to protect its investments’ value.
In response, SoftBank contends that the lawsuit is unfounded. They argue that Credit Suisse is simply trying to shift blame for its own mistakes and risky decisions. Tom Smith, a lawyer for SoftBank, mentioned in court filings that SoftBank had paid $440 million to Greensill with the understanding that the funds would be used to buy back the notes and fully reimburse Credit Suisse.
Smith emphasized that SoftBank’s actions were meant to protect Credit Suisse, highlighting the bank’s importance to Greensill’s business model. As the case unfolds, it will likely shed more light on the intricate relationships and decisions that led to this financial fallout.