Credit Suisse has found itself front and centre in the courts just one month after its collapse and subsequent forced rescue by rival UBS, which involved the write-off of US$18bn worth of debt.
Lawyers are set to have a busy time batting away lawsuits from investors and bondholders, which have already begun flowing in against the bank and Swiss regulators over the cancelled Additional Tier 1 (AT1) debt.
Investors representing over US$5bn filed a lawsuit on April 18 against Switzerland’s Financial Market Supervisory Authority in a St Gallen federal court.
"We are committed to rectifying this decision,” Quinn Emanuel Urquhart & Sullivan lawyer Thomas Werlen said.
“[It] is not only in the interests of our clients but will also strengthen Switzerland's position as a key jurisdiction in the global financial system.”
Bondholders have traditionally ranked above shareholders when banks have gone bust, meaning the “unconventional” pecking order in Credit Suisse’s case has “outraged” the former, interactive investor analyst Victoria Scholar explained.
“There has been much opposition to the UBS tie-up from angered Credit Suisse stakeholders, employees and Swiss citizens more broadly because of the rushed, forced nature of the deal,” she added.
Accusations, meanwhile, that Credit Suisse had “learnt nothing” from the 2008 financial crisis emerged in London’s High Court on Thursday in a case that predates the latest chaos.
Special acquisition vehicle Loreley Financing accused Credit Suisse of "false and dishonest representations" over the value of its 2007 collateralised debt obligation transaction with the lender.