Battle to represent Credit Suisse AT1 bondholders against Finma is on; Withers is latest firm in the fray

CLOSE to 100 investors based in Singapore and countries in the region have agreed to join a class action led by a team of lawyers from Withers, over the write-down of Additional Tier-1 (AT1) bonds issued by Credit Suisse.

More are expected to join in the coming days, the firm said on Friday (May 5).

These investors, comprising a mix of accredited investors and high-net-worth individuals, represent an aggregated claim sum of up to S$100 million.

Withers’ planned suit, led by Withers partner Shaun Leong, joins a list of several others, both in Singapore and overseas.

Speaking to The Business Times on Friday, Drew & Napier lawyer Mahesh Rai said he has also been speaking with about 100 investors in Asia who are also seeking to file a treaty claim against the Swiss government.

The treaty claim is based on the bilateral agreements signed between Switzerland and various countries in Asia, which typically stipulate that there be “fair and equitable” treatment between investors in the party states.

Some lawyers believe the Swiss government did not meet this requirement when it decided to write down the AT1 debt held by Credit Suisse.

Bloomberg earlier reported that Rai was representing close to 60 investors across Asia in an appeal that takes a different legal route.

Those 60 investors are instead appealing against the decision by the Swiss Financial Market Supervisory Authority (Finma) to prioritise shareholders over the AT1 bondholders. In doing so, they are seeking to “revoke the Finma order to write off the bonds”, and also to be awarded compensation for the move.

The claim was filed on May 3, the deadline for one to file such a claim against Finma.

Some within the 60 have also chosen to join the larger group of 100 represented by Drew & Napier in the treaty claim against the Swiss government, which is a separate action altogether.

Bondholders in Asia are joining more than a thousand others in Europe and the US in seeking damages from the Swiss authorities.

US law firm Quinn Emmanuel announced last month that it had filed a claim in Swiss court, representing more than 400 institutional investors who held about US$4.5 billion worth of AT1s. Over 70 of them, comprising individuals and corporates including family offices, are based in Singapore and various parts of Asia, said lawyers representing these investors.

Besides these, at least three other complaints have been filed.

The move by Finma to write down about 16 billion Swiss francs (S$24 billion) of debt following the sale of Credit Suisse to UBS has left investors enraged.

Bondholders, traditionally prioritised over shareholders in such events, are getting back none of what they invested. Shareholders, on the other hand, have salvaged at least some value from the takeover.

Lawyers BT spoke to said they expect to file the treaty claims within the month or so.