What's Happening?
A Singapore-based law firm, Drew & Napier, is preparing to file claims against the Swiss government following a court decision that deemed the write-down of Credit Suisse's AT1 bonds unlawful. The Swiss Federal
Administrative Court recently ruled that the write-down of 16.5 billion Swiss francs ($20.8 billion) in Credit Suisse AT1 bonds was illegal and should be revoked. Drew & Napier plans to pursue claims under an investment treaty that protects investors from unfair government actions. The firm aims to recover approximately $300 million in losses for its clients, starting with Japanese bondholders, followed by investors from Hong Kong and Singapore. Litigation-funding firm Omni Bridgeway will cover the legal fees for the affected bondholders.
Why It's Important?
This legal action could have significant implications for international investment treaties and the protection they offer to investors. If successful, the case could set a precedent for how governments handle financial crises and the treatment of bondholders. The outcome may influence investor confidence in government-backed financial instruments and impact future investment strategies. The case also highlights the role of litigation funding in enabling investors to seek redress against powerful entities, potentially encouraging more investors to pursue similar claims.
What's Next?
Drew & Napier is currently signing on more affected AT1 bondholders and is optimistic about the case's success. The legal proceedings will likely attract attention from international investors and financial institutions, potentially influencing future regulatory and legal frameworks for handling bond write-downs. The Swiss government's response and any subsequent legal actions will be closely monitored by stakeholders in the financial sector.
