Credit Suisse seeks $440m Greensill Capital losses from SoftBank
Four years after financial firm Greensill Capital collapsed, Swiss lender Credit Suisse’s $440m legal battle against SoftBank is set for showdown at London’s High Court.
Greensill Capital, founded by Alexander (Lex) Greensill, focused on providing supply chain financing and related financial services in the UK and Australia but collapsed in March 2021.
The Insolvency Service filed a director disqualification claim against Lex Greensill last March.
Credit Suisse suffered the most from the Greensill collapse, as it had substantial exposure through various funding and investment vehicles.
More than 1,000 professional investors across Europe and Asia lost $10bn as funds were trapped after the Swiss bank closed four funds at short notice in March 2021 following the collapse.
In February 2023, the Swiss financial watchdog Finma said Credit Suisse “seriously breached its supervisory obligations” in its relationship with Greensill Capital.
Crisis at Credit Suisse
The bank was battling financial and reputational issues following this collapse, as Archegos Capital Management also collapsed in the same year, costing the bank around $5.5bn.
The series of crises forced Credit Suisse, a stalwart of Switzerland’s banking sector, to seek a merger with its peer, UBS. In late 2023, UBS acquired Credit Suisse for $3.2bn.
UBS and Credit Suisse completed their merger at the end of May 2024. As part of UBS’s strategy to address the legacy issues at Credit Suisse, it was revealed last June that it would repay former Credit Suisse clients 90 per cent of the funds they invested with Greensill.
Just after the merger between the two Swiss banking giants, Credit Suisse formally launched legal action at London’s High Court as part of its plan to recoup its losses.
Legal showdown
As of 2023, it was reported that the bank had recouped $7.4bn out of the $10bn but was seeking around $440m from Japan’s Softbank Group.
The issue centres around $440m of funds that Greensill had lent to a now-defunct Californian construction firm, Katerra, which SoftBank backed.
The bank alleges that Katerra received the money via supply chain funds and is seeking repayment of those funds from SoftBank.
Commenting in a media statement in April 2023, SoftBank said: “After more than two years of attempting to shift blame for its own poor investment decisions, Credit Suisse has finally made a claim — but, as expected, it is entirely without merit and will be defended vigorously.”
The case now proceeds to London’s High Court as a 16 day trial gets underway on Thursday.
The Swiss bank called on Freshfields partners Sarah Parkes and Tom Clark with barristers from One Essex Court, including Silk Sonia Tolaney KC. While Japan’s Softbank Group defends itself, it has enlisted Quinn Emanuel’s senior partner, Richard East, and partner Nikolas Bruce-Smith, along with barristers from South Square Chambers.