Density functional calculations on the reaction of white phosphorus with the ligand bis(diphenylphosphino)methyl (dppm) at a rhodium center are presented. The cationic transition metal fragment can react as a nucleophilic as well as an electrophilic species, driven by a simple twisting of the four-membered rings. As a consequence of the conformational controlled philicity, the insertion reaction into white phosphorus occurs with a small energy barrier. The white phosphorus tetrahedron can be chelated by two cationic transition metal fragments into an opened bicyclobutane moiety, strongly stabilized by pi-stacking interactions of the phenyl groups at the two transition metal fragments. It causes a 2:1 coordination; in the first stage of the reaction two molecules of the fragment add to one molecule of white phosphorus. The resulting dicationic complex easily undergoes dissociation into a cationic monoaddition product plus one cationic transition metal fragment. The ring expansion reaction of one ligand is explained by a j-step mechanism in one intermediary product. One ligand of the transition metal fragment dissociates and facilitates, by a cascade of low-energy processes, the rearrangement of the P-4-moiety. Under bipyramid formation a PP-bond is broken, and the free ligand finally attaches to one phosphorus atom. Overall the reaction can be divided in low-energy processes, which pass through different unstable intermediates and more high-energy processes, requiring ligand dissociation.