Banking Crisis
Global Litigation House Builds Force To Challenge Credit Suisse AT1 Write-Downs
The write-down has prompted criticism, as holders of some equities appear to have gained more protection than holders of the AT1s.
A global specialist litigation law firm said it has added over 1,000 holders of Additional Tier 1 debt that was issued by Credit Suisse, the value of which was wiped out when the Swiss state brokered a UBS takeover of the stricken Swiss bank.
Quinn Emanuel Urquhart & Sullivan said yesterday in a statement that it has added more plaintiffs to its group appeal against the Swiss Financial Market Supervisory Authority, or FINMA. A filing was submitted on May 3. Quinn Emanuel has partnered with five law firms, that are representing investors with smaller bond holdings, in the US, the UK, Singapore, jurisdictions of the Gulf Cooperation Council, and Switzerland.
AT1 bonds are high-risk forms of debt that European banks, including Credit Suisse, issued as forms of buffer capital in the aftermath of the 2008 financial crisis.
Under the terms of the UBS takeover in March, holders of SFr16 billion ($18 billion) of AT1 debt, said to include organizations such as BlackRock, Invesco and PIMCO, had their holdings written down.
The write-down has prompted criticism, as holders of some equities appear to have gained more protection than holders of the ATIs.
On April 18, Quinn Emanuel challenged moves by FINMA requiring Credit Suisse to write down the AT1 bonds following the acquisition of Credit Suisse by UBS.
Quinn Emanuel said it is working with the following firms:
-- US – Wollmuth Maher & Deutsch;
-- UK – Keidan Harrison;
-- Singapore – Engelin Teh;
-- Gulf Cooperation Council – Global Advocacy and Legal Counsel;
and
-- Switzerland – Geissbühler Weber & Partners.
“These bonds were sold to a large variety of investors, including pension funds but also retail investors given that the Swiss franc instruments in particular had a denomination and minimum trading value of SFr5,000. With this additional group, the number of affected investors exceeds 1,000 and the submission could therefore be the largest collective complaint ever filed in Switzerland,” Professor Thomas Werlen, managing partner of Quinn Emanuel Switzerland, said.
