A significant legal judgment was handed down on October 15, 2025, in the complex case involving Credit Suisse (now part of UBS) and Softbank, concerning the fallout from the collapse of Greensill Limited. The High Court, in a decision that has provided considerable food for thought for legal professionals and financial institutions alike, found that certain transactions were indeed at an undervalue but ultimately declined to award any remedy to the claimants, Credit Suisse and its successor, UBS.
The Genesis of the Dispute: Greensill’s Collapse and Katerra’s Debt
The case stems from the insolvency of Greensill Capital in March 2021, which had significant repercussions across the global financial landscape. At the heart of this particular dispute was a sum of $440 million. This amount represented funds that Greensill Limited had lent to Katerra Inc., a Californian construction company that was backed by various Softbank group entities. A sub-fund of Credit Suisse had invested in loan notes, known as the “Fairymead Notes,” with a face value of $440 million, intended to be secured by the loan from Greensill to Katerra.
In December 2021, a series of transactions, referred to as the “Impugned Transactions,” occurred between Greensill and Softbank. These transactions, as later detailed in the judgment, left Greensill Limited without assets and rendered the Fairymead Notes valueless. Credit Suisse, through its fund, sought relief under section 423 of the Insolvency Act 1986, alleging that Softbank was culpably involved in orchestrating these transactions to defraud creditors.
Court’s Findings: Undervalue Transactions Without Recourse
Presided over by Lord Justice Miles, the High Court found that the “Impugned Transactions” were indeed at an undervalue, a position that Greensill Limited, acting through its liquidators, also took. However, Greensill Limited did not pursue a substantive position on culpability or the appropriate relief. The claimants, Credit Suisse and UBS, succeeded in proving that the transactions were at an undervalue and that Greensill Limited had the requisite purpose under section 423 of the Insolvency Act.
Despite these findings, the court controversially declined to award a remedy. This decision is notable because it is rare for a court to find that a transaction occurred at an undervalue and yet refuse to grant relief. The judge reasoned that reinstating the debt claim and related security against Katerra Inc. would be inappropriate. This was primarily due to Softbank acting in good faith throughout the process. Furthermore, Katerra Inc.’s subsequent insolvency meant its shares had become worthless, rendering any remedy largely meaningless.
Softbank argued, and the court accepted, that they believed the $440 million injection of funds would be used to pay the Fairymead Notes and “internalise” the debt. Softbank did not know or expect that the transactions were being entered into to prejudice Credit Suisse’s rights. The court found that Softbank did not orchestrate the transactions to obtain Katerra shares free of debt and acted in its own commercial interest, but without knowledge of any improper purpose by Greensill.
Legal Representation and Broader Implications
Charles Russell Speechlys, with Daniel Lewis of Wilberforce Chambers, acted for the Seventh Defendant, Greensill Limited, represented by its joint liquidators, Geoffrey Rowley and Paul Allen of FRP Advisory. The Greensill collapse, and the subsequent litigation, has had far-reaching consequences. Credit Suisse itself faced significant financial turmoil, partly due to its exposure to Greensill funds, which ultimately led to its state-backed rescue by UBS in 2023. This judgment represents one of the most high-profile legal battles arising from the Greensill saga.
The financial news cycle today is often dominated by such complex cases, highlighting the intricate interplay between financial markets, corporate insolvency, and legal recourse. While this judgment focused on specific financial transactions, the instability it reflects can have ripple effects across various economic sectors, from the caribbean to global supply chains for food and manufactured goods. The elaborate financial structures and legal arguments presented in this case serve as a stark reminder of the complex recipes for financial engineering and the challenging pursuit of justice when large sums are involved.
In conclusion, the High Court’s decision in the Credit Suisse versus Softbank case regarding Greensill Limited underscores a rare legal scenario: a clear finding of a transaction at an undervalue, yet a refusal to grant a remedy due to the good faith of the recipient and the subsequent worthlessness of the underlying assets. It is a judgment that will be closely studied for its implications on insolvency law and the recovery of assets in complex financial disputes.