Credit Suisse wants SoftBank subpoena before it files UK suit over Greensill collapse

[LONDON] Credit Suisse Group's plan to sue SoftBank Group in England over the collapse of Greensill Capital shouldn't prevent it from first extracting internal records in the US, the Zurich-based bank said.

Credit Suisse is seeking information from SoftBank as it prepares to file a lawsuit in England to recover losses from last year's implosion of financier Lex Greensill's supply-chain finance empire.

Credit Suisse urged a US judge in San Francisco Monday (Mar 21) to reject SoftBank's arguments that the information it seeks is only relevant to a later stage of litigation in the UK.

Unlike in the US where a lawsuit can be filed with no communication between litigants, parties in an anticipated suit in England "are expected to take a series of pre-litigation steps", Credit Suisse said in the filing.

Credit Suisse is seeking information from board meetings at Katerra, a US-based construction company in which SoftBank was a major investor. The bank is trying to reclaim US$2.7 billion in overdue loan payments from borrowers including Katerra. It has said it invested in about US$440 million worth of notes backed by the construction company.

Detailing the steps it has taken to comply with English practices, Credit Suisse told the US judge it sent SoftBank a Feb 10 "letter before action" spelling out the grounds for its lawsuit, according to the filing.

Besides offering no "substantive response" to the letter, SoftBank has "not produced a single document" that was requested, Credit Suisse said.

SoftBank is trying to block Credit Suisse's subpoena, arguing it's a desperate attempt to deflect responsibility for the "embarrassing" loss of hundreds of millions of dollars in the Greensill collapse. SoftBank also claims Credit Suisse has misrepresented that its UK lawsuit was to be filed imminently.

Credit Suisse cut ties with SoftBank in May, deciding to no longer do any new business together, after the collapse of Greensill and amid conflict of interest allegations, people with knowledge of the decisions earlier told Bloomberg.

The Swiss bank has repaid US$6.7 billion to investors in supply-chain funds affected by Greensill's failure. BLOOMBERG