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Lawyers circle around rushed Credit Suisse takeover

UBS and Credit Suisse logos
Investors and shareholders are crying foul about the UBS buyout of Credit Suisse. © Keystone / Michael Buholzer

The takeover of Credit Suisse by UBS may face numerous legal challenges as investors and shareholders add up the cost of a deal that was rushed through over a single weekend.

According to various media reports, lawyers are already sharpening their knives in anticipation of courtroom battles.

+ Read about the consequences of Credit Suisse’s collapse

The Ethos Foundation, which represents shareholders in many Swiss multinationals, told the Financial Times that it is considering a legal challenge.

Credit Suisse shareholders were frozen out of the UBS takeover deal, which was sealed without a vote by the company’s owners.

The Financial Times also heard from angry Credit Suisse bond holders who are incensed at a decision to write off CHF16 billion ($17 billion) of certain bonds issued by the bank.

“They changed the law and have basically stolen CHF16 billion worth of bonds,” Davide Serra, CEO of Algebris Investments, told the newspaper.

The international law firm Quinn Emanuel Urquhart & Sullivan is putting together a team to examine legal challenges, according to the Tages Anzeiger.

Law professor Peter V Kunz told Swiss public broadcaster SRF that he expects several lawsuits from abroad.

“The whole deal was no more than an act of panic and is problematic under the rule of law,” he said.

+ Where did it all go wrong for Credit Suisse?

Kunz is fearful that Credit Suisse’s largest shareholder, the Saudi National Bank, could mount a legal challenge to being frozen out of the decision-making process.

Even before the weekend’s takeover, Credit Suisse had been facing lawsuits in the United States from people complaining they had been deceived by the bank.

But the Tages Anzeiger points to clauses in the Swiss legal code that allows the government to take “necessary measures” to protect Switzerland’s foreign policy interests and reputation.

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