Credit Suisse Wins Court Order to Get Data from SoftBank After Greensill Collapse

(Bloomberg) -- Credit Suisse Group AG won a court order permitting it to seek documents from SoftBank Group Corp. as part of a lawsuit the Zurich-based bank has said it plans to file in England stemming from the collapse of Greensill Capital.

A U.S. Magistrate judge in San Francisco granted Credit Suisse’s request to serve a subpoena on SB Investment Advisers, a California-based affiliate of SoftBank. Credit Suisse is trying to reclaim $2.7 billion in overdue loan payments from borrowers including Katerra Inc., a U.S.-based construction company in which SoftBank was a major investor.

Credit Suisse has said it invested in about $440 million worth of notes backed by Katerra. The bank is seeking communications and information from board meetings at Katerra.

“This nothing more than a desperate fishing expedition by Credit Suisse to support a meritless attempt to try to shift blame for their own losses in Greensill,” Softbank said in an emailed statement. “Should they actually bring a claim we will vigorously defend it.”

The collapse of financier Lex Greensill’s empire was the first of two big hits to Credit Suisse last year, with the implosion of Archegos Capital Management coming shortly afterward. The bank has repaid $6.7 billion to investors in supply-chain funds affected by Greensill’s failure.

Credit Suisse cut ties with Softbank in May last year, deciding to no longer do any new business with the Japanese firm, after the implosion of Greensill’s collapsed supply-chain finance empire and amid conflict of interest allegations, people with knowledge of the decisions earlier told Bloomberg.

In 2020, the Swiss bank had conducted an internal review into the Greensill funds and the potential conflicts of interest involving Softbank. A number of its portfolio companies received loans via supply-chain funds at Credit Suisse, while Softbank was also an investor in the Swiss lender’s funds. In the aftermath, Softbank pulled $700 million out of them and the bank also changed its investment guidelines.

The overlapping financial relationships had raised questions whether Softbank was using the Credit Suisse funds to prop up investments in the Vision Fund, including Greensill Capital, in which it had a substantial stake.

U.S. Magistrate Judge Joseph Spero said in a Jan. 4 order that SB Investment Advisers has 30 days from the date it receives the subpoena to produce the information or file an objection to it.

Credit Suisse spokesman Andreas Kern declined to comment in an email on Friday. 

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)

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