(Bloomberg) -- Credit Suisse Group AG filed for permission to kick-off a long anticipated lawsuit blaming SoftBank Group Corp. in part for losses the Swiss lender’s clients suffered from the collapse of finance firm Greensill Capital.
Credit Suisse filed the request at a London court on Aug. 3, a necessary preliminary step because the clients’ money was not lent by the bank but by Greensill, said people familiar with the litigation who who asked not to be identified. The Financial Times reported the filing earlier on Thursday.
If approved, it will be the opening salvo in a closely-watched legal battle that sprung from the high-profile collapse of financier Lex Greensill’s empire in 2021. Its meltdown was the first of two big hits to Credit Suisse last year, with the implosion of Archegos Capital Management coming shortly afterward.
Credit Suisse is suing Softbank in the US to try and force the Japanese bank to disclose documents relating to its dealing with Greensill. Overall, the Zurich bank is trying to reclaim $2.7 billion in overdue loan payments from borrowers including Katerra Inc., a US-based construction company in which SoftBank was a major investor.
“After failing to bring a claim for over eight months, Credit Suisse has taken a required procedural step in order to prolong its desperate attempt to blame SoftBank for its own poor investment decisions,” a SoftBank spokesperson said in an emailed statement.
In late 2020, Greensill restructured its relationship with Katerra and wrote off $440 million of obligations it was owed by Katerra, obligations that Greensill had earlier used to back the identical dollar amount of notes it had sold to Credit Suisse.
Credit Suisse alleges SoftBank concocted the restructuring so that it could pull its own money out, knowing full well that Greensill, already in free-fall, would be unable to repay the $440 million it owed to Credit Suisse, people familiar with the litigation said. The bank is now suing to recover that $440 million, one of the people said.
A Credit Suisse spokesman declined to comment on the news of the filing.
(Updates penultimate paragraph with $440 million being sought by bank)
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