FL-2022-000014 - [2025] EWHC 2631 (Ch)

On 30 December 2020 the following information was reported in an article in the Wall Street Journal (“the 30 Dec WSJ Article”) and in a Dow Jones update (“the DJ Update”):

“SoftBank Group Corp. has agreed to invest $200 million more to bail out Katerra, a construction startup that ran into financial problems as it tried to shake up the building industry.

Katerra's shareholders on Wednesday voted to approve the new investment on top of the roughly $2 billion SoftBank has already invested. Under the plan, the Japanese investment firm's stake in Katerra will grow to give it a majority stake, while other investors will see their stakes severely diluted, according to people familiar with the matter.

SoftBank's new investment will enable Katerra to avoid having to seek bankruptcy protection, according to Katerra's chief executive, Paal Kibsgaard. The company needed SoftBank's latest investment "to continue as a going concern," he said in a notice to shareholders about Wednesday's meeting.

As part of the funding package, SoftBank-backed financial-services firm Greensill Capital agreed to cancel around $435 million in debt owed by Katerra in exchange for a roughly 5% stake in the company, Mr. Kibsgaard said in an interview Wednesday”.

On 30 December 2020 Mr James Doran (Greensill Group) emailed Mr Greensill regarding communications from the Wall Street Journal about the 30 Dec WSJ Article.

In response, Mr Greensill said, “No comment from us” and “we will receive 100 cents in the dollar from softbank on this - so no loss for us or our investors…FYI, this position is held by CS - and they are aware”.

The DJ Update was forwarded by Mr Degen to Mr Greensill that evening.

Mr Degen asked Mr Greensill: “Not new for you... means you swap in to eq after the buy back I assume...?”. Mr Greensill replied: “Correct, Michel. Warmest regards, Lex”.

On 31 December 2020 Mr Mathys asked Mr Greensill for further clarification as to the information that could be shared with investors following the reported restructuring. Mr Greensill replied suggesting some wording:

“The Katerra multi-obligor receivables programme is 100% covered by insurances. All securities under this programme will therefore pay out in full within the next 90 days. There will be no performance impact”.

Mr Mathys responded as follows:

“Good Morning Lex,

This will not work.....this looks like an non payment / default.

We sold this program back to GS with settlement 14.1…

We should say that the program will be either paid back or undo for the fund next two weeks”.

At 12:48pm Mr Mathys sent Mr Degen with subject line “vorschlag” (suggestion):

“Up to December 31, we have executed additional sell orders in notes related to Vision Fund in order to bring the remaining exposure in line with the agreed internal investment guidelines. All notes from View as well as the entire Katerra multi-obligor program were sold (after transfer of the Katerra notes, the program will be cancelled by Greensill thereafter in exchange for an equity stake in the company). As required by Greensill, value date of the transactions is January 14th”.

Mr Degen replied to Mr Mathys at 12:49pm saying “Ich mache Vorschlag…” (I make a suggestion).

“The fund does not have credit exposure to Katerra. As a multiobligor receivables programme the credit risk is on multiple customers of Katerra. In any event, the program is 100% insured.

The notes maturing March 31, 2021 sold back to Greensill. The requested settlement date by Greensill has been January 14, 2021. There will be no performance impact.”

Mr Mathys then sent an email with subject line “Update SCF – VF” to Mr Degen at 1:54pm, containing the wording set out in both his email of 12:48pm and Mr Degen’s email of 12:49pm:

“Up to December 31, we have executed additional sell orders in notes related to Vision Fund companies in order to bring the remaining exposure in line with the agreed internal investment guidelines. All notes from View as well as the notes from Katerra multi-obligor program maturing in March and May 2021 were sold back to Greensill. As required by Greensill, the settlement date of the Katerra notes is January 14th.

After transfer of the Katerra notes, the program will be cancelled by Greensill. The fund did not have credit exposure to Katerra. As a multi obligor receivables program the credit risk is on multiple customers of Katerra. In any event, the program is 100% insured. There will be no performance impact. A detailed update of all exposures - which shall be in line with the new internal guidelines - will be provided in couple of days.”

In an email to Mr Varvel on 4 January 2021, Mr Greensill said:

“Katerra has been restructured, however the fund does not have credit exposure to Katerra. As a multi-obligor receivables programme the credit risk is on multiple customers of Katerra. These notes all run off within the next 90 days and the programme is 100% insured. There will be no performance impact on the SCF Fund”.