CREDIT SUISSE AT1s: Pallas Partners forming Investor Group



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 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).

About Pallas Partners

Pallas Partners is a London and New York elite litigation firm specialising in high stakes litigation, international arbitration and investigations at the very top end of the market, for the world’s most sophisticated clients. The firm litigates cutting edge and complex cases, including securities litigation in the UK and Europe.

Pallas and its lawyers have an extraordinary depth of experience in litigating matters relating to bank resolutions, bank wind-downs, government interventions and CoCo redemptions and cancellations. We have acted on bank and investor challenges in Iceland, Ireland, UK, Cyprus, Greece, Spain, Portugal, Austria and Ukraine, and have represented holders of CoCo bonds in challenging cancellations and early redemptions, through to the UK Supreme Court.

Pallas is currently representing lenders to Mozambican SPVs in the “tuna bond” litigation against, amongst others, Credit Suisse, before the English Courts. We are also representing Greensill investors with respect to claims against Credit Suisse. Pallas also has an extensive practice acting for special situations and distressed holders in designing and implementing litigation strategies to recover value and create leverage.

Pallas’ Managing Partner Natasha Harrison is leading this mandate. Natasha is one of the leading litigators of the most important investor disputes of the last decade. Natasha is top ranked in Legal 500 and Chambers & Partners and is described as a “leading banking litigator” in those publications. Super Lawyers and Lawdragon have named her as a leading commercial litigator and Who’s Who named her as a Restructuring Thought Leader for 2022. In 2021 she won Legal Advisor of the Year at the Women in Finance Awards; she was shortlisted for a Lifetime Achievement Award by the Law Society and for Managing Partner of the Year by Legal Business. She was also listed by Financial News as one of the 50 Most Influential Lawyers in 2022 and as one of the 100 Most Influential Women in European Finance in 2022.

The wider team includes Duane Loft in New York, Fiona Huntriss, Tracey Dovaston and Neil Pigott in London, all of whom have deep experience in these issues.

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Ed Gascoigne-Pees, Partner
Julia Tilley, Partner
+44 (0)7815 068 387

Natasha Harrison:
Pallas AT1 team:

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