Credit Suisse Seeks SoftBank Subpoena, Readies U.K. Suit

Credit Suisse Group AG asked a U.S. court to force a SoftBank Group Corp. entity to hand over documents, as it prepares to file a lawsuit in the latest fallout from the collapse of Greensill Capital

A sign above the entrance to the Credit Suisse Group AG headquarters in Zurich, Switzerland, on Monday, Nov. 1, 2021.
By Tina Davis
December 25, 2021 | 01:46 PM

Bloomberg — Credit Suisse Group AG asked a U.S. court to force a SoftBank Group Corp. entity to hand over documents, as it prepares to file a lawsuit in the latest fallout from the collapse of Greensill Capital.

In a 30-page filing submitted Thursday to a Northern California federal court, Credit Suisse said it was seeking the documents in preparation for a lawsuit it plans to file in England “in the coming weeks” against parties that could include SoftBank and its affiliates.

Credit Suisse said in May it was cutting ties with SoftBank, distancing itself from a key backer to Lex Greensill’s collapsed supply-chain finance empire after conflict-of-interest allegations. SoftBank has been a prolific dealmaker and last year Credit Suisse and other banks held about $8 billion of SoftBank shares in collateral, pledged by founder Masayoshi Son.

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Credit Suisse says in the filing, reported earlier by the Financial Times, that it invested in about $440 million worth of notes backed by Katerra Inc., a U.S.-based construction company in which SoftBank was a major investor. The financing was created by Greensill to cover the period between delivery of goods and payment for the goods.

SoftBank “orchestrated a financial restructuring of Katerra in late 2020″ in which the two companies, along with Greensill, “agreed, improperly, to cancel the Katerra receivables program and purported to forgive the amounts outstanding under that program” that were due to Credit Suisse, the Swiss bank said. In exchange, Greensill received shares in a Katerra entity.

While SoftBank wasn’t a formal party to the agreement, “there can be no question that SoftBank was aware of it,” Credit Suisse said, noting that the shares were later transferred to a SoftBank affiliate and a SoftBank managing partner sat on the company’s board.

Credit Suisse said it “plans to assert a claim against the SoftBank defendants” under a law “which allows English courts to order remedial measures to make whole victims of undervalued transactions that put valuable assets -- such as the amounts outstanding under the Katerra receivables program -- beyond the reach of a person or entity.”

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SoftBank didn’t immediately respond to an inquiry sent outside of regular business hours in Japan. A spokesman for Credit Suisse declined to comment.

The subpoena seeks documents from SB Investment Advisers in California, from Sept. 1, 2020 to May 31, including any materials from Katerra board meetings and communications regarding the restructuring and other associated agreements.

The case is In re Ex Parte Application of Credit Suisse Virtuoso, 21-mc-80308, U.S. District Court for Northern District of California (San Francisco)