Credit Suisse Fund Accuses SoftBank Over $440 Million Investment
Court filing seeks subpoena on a U.S. arm of SoftBank, deepens conflict over Greensill Capital’s downfall
A Credit Suisse fund is getting ready to sue SoftBank in the U.K., according to a new court filing.PHOTO: ARND WIEGMANN/REUTERS
By
Charles Forelle Follow
Updated Dec. 25, 2021 11:28 am ET
A Credit Suisse Group AG CS 1.68% fund accused SoftBank GroupCorp. 9984 -0.59% in U.S. court filings of orchestrating transactions that rendered worthless a $440 million investment the fund had made to finance a SoftBank-backed company.
The filing, made Thursday in a U.S. District Court in California, asks a federal judge to permit the Credit Suisse fund to serve a subpoena on a U.S. arm of SoftBank. The filing, which says that the fund is preparing to sue SoftBank in the U.K., deepens the dispute over the demise of Greensill Capital, a supply-chain finance company that tumbled into insolvency earlier this year.
Greensill made loans to companies that served as advances on expected payments from those companies’ customers; Greensill packaged the loans into securities, which investment funds run by Credit Suisse bought.
One such company was Katerra Inc., a U.S. construction startup. The Credit Suisse fund held $440 million in notes backed by Greensill’s lending to Katerra, and when Katerra ran into financial trouble last year, Greensill forgave the lending.
SoftBank was an investor in both Greensill and Katerra, and in the U.S. court filing the Credit Suisse fund said SoftBank “orchestrated a deal” that cut the fund out of any possible proceeds without telling the fund.
A SoftBank spokesman declined to comment, as did a spokeswoman for Credit Suisse.
SoftBank put money into Greensill at the end of 2020, and Credit Suisse executives expected that money would go to their funds to make good on the Katerra loan—instead, it ended up in Greensill’s German banking unit, The Wall Street Journal reported in April.
In June, the Journal reported that Credit Suisse had dissolved a personal banking relationship with SoftBank founder Masayoshi Son and clamped down on transactions with the company.
The court filing made Thursday is known as a Section 1782 petition, in which a party can ask a U.S. court to order evidence-gathering for a proceeding outside the U.S. The Credit Suisse fund argues that it has taken enough steps toward suing SoftBank in the U.K. to justify the subpoena, which seeks a variety of documents.
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