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Business Recorder
4 days ago
- Business
- Business Recorder
Credit Suisse, SoftBank fight over Greensill losses in $440mn London lawsuit
LONDON: Credit Suisse's $440 million London lawsuit against Japan's SoftBank Group Corp kicked off on Thursday over losses linked to Greensill Capital, with the collapsed finance firm's founder Lex Greensill expected to give evidence next week. The case, which centres on funds Greensill lent to Katerra, a SoftBank-backed U.S. construction group, is the latest concerning Greensill's demise, which caused heavy losses for investors and prompted lawsuits and regulatory probes. Greensill's collapse made Credit Suisse close $10 billion of funds linked to the financial firm and, along with other scandals, led to the 2023 state-backed rescue of the 167-year-old Swiss bank by rival UBS Group. UBS is now pursuing the case against SoftBank, with Lex Greensill and Eric Varvel, former chairman of Credit Suisse's investment bank, among the key witnesses at the trial. The lender alleges that Greensill, at SoftBank's behest, gave up rights to Katerra's debts in return for shares which it then passed on to a SoftBank Group entity, leaving Credit Suisse out of pocket in relation to $440 million of notes. UBS completes merger of Credit Suisse service units in India Lawyer Sonia Tolaney, representing the Credit Suisse fund that held the notes, said SoftBank was heavily exposed to both Greensill and Katerra, to a total of around $3.5 billion, and 'needed to protect the value of its investments'. SoftBank, however, says the lawsuit lacks merit and is simply an attempt by Credit Suisse to 'pin blame (on SoftBank) for a loss caused by their own negligence and risk-taking'. Tom Smith, a lawyer for SoftBank, said in court filings that SoftBank paid $440 million to Greensill 'on the agreement and understanding that this was to be used to repurchase or redeem' the notes and pay back Credit Suisse in full. 'Far from seeking to harm (Credit Suisse), the (SoftBank defendants) and (Lex Greensill) acted to protect (Credit Suisse) because of its importance to Greensill's business model,' he said.
Yahoo
4 days ago
- Business
- Yahoo
Credit Suisse, SoftBank fight over Greensill losses in $440 million London lawsuit
LONDON (Reuters) -Credit Suisse's $440 million London lawsuit against Japan's SoftBank Group Corp kicked off on Thursday over losses linked to Greensill Capital, with the collapsed finance firm's founder Lex Greensill expected to give evidence next week. The case, which centres on funds Greensill lent to Katerra, a SoftBank-backed U.S. construction group, is the latest concerning Greensill's demise, which caused heavy losses for investors and prompted lawsuits and regulatory probes. Greensill's collapse made Credit Suisse close $10 billion of funds linked to the financial firm and, along with other scandals, led to the 2023 state-backed rescue of the 167-year-old Swiss bank by rival UBS Group. UBS is now pursuing the case against SoftBank, with Lex Greensill and Eric Varvel, former chairman of Credit Suisse's investment bank, among the key witnesses at the trial. The lender alleges that Greensill, at SoftBank's behest, gave up rights to Katerra's debts in return for shares which it then passed on to a SoftBank Group entity, leaving Credit Suisse out of pocket in relation to $440 million of notes. Lawyer Sonia Tolaney, representing the Credit Suisse fund that held the notes, said SoftBank was heavily exposed to both Greensill and Katerra, to a total of around $3.5 billion, and "needed to protect the value of its investments". SoftBank, however, says the lawsuit lacks merit and is simply an attempt by Credit Suisse to "pin blame (on SoftBank) for a loss caused by their own negligence and risk-taking". Tom Smith, a lawyer for SoftBank, said in court filings that SoftBank paid $440 million to Greensill "on the agreement and understanding that this was to be used to repurchase or redeem" the notes and pay back Credit Suisse in full. "Far from seeking to harm (Credit Suisse), the (SoftBank defendants) and (Lex Greensill) acted to protect (Credit Suisse) because of its importance to Greensill's business model," he said. Sign in to access your portfolio
Mint
5 days ago
- Business
- Mint
Lex Greensill Set to Testify in $440 Million Credit Suisse UK Trial
Lex Greensill will testify in court for the first time since the high-profile collapse of his trade finance firm, as a $440 million Credit Suisse lawsuit against SoftBank Group Corp. gets underway. Evidence from the embattled financier will be the centerpiece of a month long London trial that starts on Thursday over investor losses in a failed startup. Credit Suisse is seeking damages from SoftBank alleging that a series of transactions with Greensill deprived its investors of $440 million in funds. Greensill is scheduled to appear at the civil trial next week alongside other witnesses including former chief executive officer of Credit Suisse's investment bank Eric Varvel. The implosion of Greensill Capital in March 2021 saw Credit Suisse freeze and wind down a $10 billion group of funds that the Swiss bank had marketed to clients as safe investments. Greensill's demise was one of several major scandals that knocked confidence in the Swiss lender, left clients with hundreds of millions of dollars of losses and ultimately led to its forced takeover by UBS. Meanwhile, SoftBank's Vision Fund wrote down its own $1.5 billion holding in Greensill to close to zero. UBS Group AG is pursuing the London claim on behalf of its former Swiss rival in a bid to recover funds for investors trapped in the supply chain finance vehicles. The bank has looked to settle several high profile legacy legal headaches it inherited from Credit Suisse, extricating itself from a sprawling civil suit over Mozambique tuna bonds and more recently a US tax probe. The fallout from Greensill's collapse has spawned multiple legal fights around the world. Lex Greensill himself is fighting moves by the UK government to have him disqualified as a director, while his firm's own administrators filed a civil case against him in April. His spokesperson didn't respond to a request for comment. The London suit is set to consider the way that Greensill restructured its relationship with Katerra Inc., a US-based construction company in which SoftBank was a major investor. Credit Suisse alleges SoftBank concocted the restructuring in 2020 so that it could pull its own money out of the firm, knowing full well that Greensill, already in free-fall, would be unable to repay the $440 million it owed to Credit Suisse. SoftBank will counter that Credit Suisse case has always been an attempt to shift blame 'for its own poor investment decisions.' The allegations are 'entirely without merit,' it said previously. Softbank's lawyers argued that the $440 million funds were provided by the Vision Fund on the basis that it would be used to repay the Credit Suisse notes. UBS said the bank 'will continue to pursue all paths to maximize financial recovery of the Supply Chain Finance Funds, acting in the interests of all our stakeholders.' This article was generated from an automated news agency feed without modifications to text.
