Softbank says Credit Suisse is to blame for the Fund’s $440 million Greensill losses

Softbank Group Corp., which is facing a $440 million lawsuit from Credit Suisse, said the bank is to blame for some of the investor losses related to the collapse of Greensill Capital.

In the latest stage of the long-running dispute, Softbank said executives at the defunct Swiss lender had agreed to a deal with Greensill that would have helped repay the bank’s investors only for the deal to stall.

UBS Group AG is pursuing the application in London on behalf of its former Swiss rival in a bid to recover funds for investors stuck in supply chain finance vehicles. Lawyers for the bank said financier Lex Greensill “had no intention” of completing the deal and did not have the funds.

Credit Suisse files $440m claim against SoftBank in Greensill dispute

In the latest court filing, Softbank filed in the months before the high-profile collapse of Greensill’s supply chain business in 2021. It was one of several major scandals that have shaken confidence in Credit Suisse, leaving clients with hundreds of millions of dollars. losses and eventually led to its takeover by UBS. Meanwhile, Softbank’s Vision Fund has reduced its own $1.5 billion holding in Greensill to near zero.

The London trial is to consider how Greensill restructured its relationship with Katerra Inc., a U.S. construction company in which SoftBank was a major investor. Credit Suisse claims that SoftBank concocted the 2020 restructuring so it could get its money out of the firm, knowing full well that Greensill, already in freefall, would not be able to repay the $440 million it owed Credit Suisse.

UBS has sought to address legacy problems at Credit Suisse and said in June it would give supply chain fund investors 90% of their value. About $2.3 billion remains in vested funds, according to company filings.

Lex Greensill separately faces a possible director ban after Britain’s Insolvency Service ruled he was unfit to run a company for up to 15 years. The financier is contesting the lawsuit.

On December 31, 2020, Credit Suisse and Greensill entered into an agreement that would allow Greensill to repurchase $440 million of notes from supply chain financing funds, according to the Softbank filing. But the deal was called off before it was settled.

“In so doing, Credit Suisse itself caused the loss it now seeks through the debt claim,” Softbank’s lawyers wrote in the filing.

Softbank said Lex Greensill was also asked if the $440 million would be used to “plug that hole and be paid to Credit Suisse.”

“Yes, it was the absolute understanding of all parties,” he replied, according to court records. “It’s not a number coincidence.”

Lawyers for Credit Suisse cited a “lack of liquidity within the Greensill Group” as the reason the deal did not go through and said the bank’s executives tried to keep the deal afloat.

Just days after the deal was signed, Credit Suisse’s then-head of asset management, Eric Varvel, emailed Lex Greensill: “I think the right way to approach this – for both of us – is to complete the deals that were confirmed. he said.

“Lex Greensill had no intention of allowing the Greensill Group to proceed with and complete the transaction,” UBS lawyers said. A spokesman for Greensilll did not immediately respond to an email seeking comment outside normal US business hours.

Softbank said the Swiss bank’s executives had agreed that the fund’s notes would instead be “partly held to maturity and partly purchased until the end of March 2021” to allow Greensill to raise equity.

Instead, the financial firm collapsed on March 8.

Photo: Signage at a SoftBank Corp. store. from Tokyo. Photo credit: Toru Hanai/Bloomberg

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