LONDON — Pallas Partners LLP (“Pallas”) is building a group of holders of Credit Suisse’s Additional Tier 1 Bonds (“AT1s”) wiped out at the weekend as part of the Swiss government-mandated takeover of Credit Suisse by UBS. The group will pursue a multi-faceted litigation strategy to seek to mitigate losses suffered by holders of the AT1s and allow recoveries to be made, through focused litigation against those who have acted to deprive the AT1s of their contractual and other rights.
Pallas held an investor call on Wednesday 22 March 2023 to discuss the group and the litigation strategy. Please email CSAT1Investors@pallasllp.com for details on how to join the group.
The Investor Group
Since events over the weekend by which the Swiss government and regulators forced through a takeover of Credit Suisse by UBS, a term of which was to write down the AT1s to zero, Pallas has been working with AT1 holders and investors to explore options to recover losses and understand the value play through litigation.
Pallas and investors are focused on the actions of the Swiss authorities (FINMA, the Federal Council and others) to pass through last-minute legislation purportedly providing for this AT1 wipe-out which upended the established claims hierarchy allowing equity holders to remain in the structure to the detriment of the AT1s.
We are exploring a cohesive multi-jurisdictional strategy to be pursued by a cohesive group of international investors in the AT1s, to recover losses.
Investors will be eligible to join the investor group if they held AT1s as at 17 March 2023, or hold AT1s at present. There is no jurisdictional restriction.
The Litigation Strategy
In extraordinary circumstances such as these, it is imperative that investors work together to pursue a litigation strategy designed to litigate against the right defendants in the right jurisdictions. A fractured investor community, spending time litigating in the wrong places against the wrong defendants will not serve the interests of the AT1s, and will not drive recoveries for AT1 holders.
Pallas is therefore building out a litigation strategy which considers both local law remedies and also remedies outside of Switzerland given the international nature of investors and the places in which statements were made to the market regarding Credit Suisse’s liquidity and solvency position.
Details of the proposed recoveries strategy were shared on the call, and Pallas can provide more detailed advice once an investor is a member of the group (and subject to confirmation of AT1 holdings).