More AT1 Lawsuits Against UBS in the US
The legal battles over the AT1 bonds rendered worthless in the Credit Suisse acquisition are far from over. A court in New York has now admitted two additional lawsuits.
The lawsuits, filed by US holders of Credit Suisse (CS) AT1 bonds and American Depositary Shares (ADS), target UBS and several former CS executives. A judge in New York has admitted two cases brought by U.S. investors, according to a «Reuters» report.
The defendants include former CS CEO Ulrich Körner, former Chairman of the Board Axel Lehmann, and former Chief Financial Officer Dixit Joshi.
With the court’s decision, the investment firm Core Capital Partners is now permitted to sue on behalf of US buyers of the AT1 bonds. These bonds were declared worthless by the Swiss Financial Market Supervisory Authority (Finma) as part of the emergency acquisition of CS by UBS.
Path Cleared for Class Action
The judge has also paved the way for a class action by holders of CS ADS traded in the US, as well as various CS bonds. However, the judge rejected a motion to consolidate the lawsuits.
During the emergency merger, Finma ordered CS to write down the bonds, which had a total volume of 16 billion francs. The defendants had requested that the lawsuit filed by Core Capital be dismissed, citing the Finma order.
Alleged Misconduct
However, the court found it plausible that the alleged misconduct by the defendants led to a decrease in the value of the AT1 bonds – «which ultimately culminated in the complete write-down of all Credit Suisse AT1 bonds to zero.»
Various legal proceedings against the AT1 write-down and the valuation of CS during the takeover are currently underway in Switzerland, the US, and Singapore.
