Sideways: Credit Suisse bondholders try to follow the money
An odd legal case trying to pin the blame for Credit Suisse additional tier-1 (AT1) bond losses on former chief executive Brady Dougan and other veteran managers could complicate the task of recovering losses for holders of $17 billion of bonds that were wiped out in the takeover by UBS.
A legal case filed in New York on June 20 took a novel approach to recovering losses on Credit Suisse AT1 bonds held by French asset manager Axiom and German fund Assenagon.
The case seeks to blame former Credit Suisse chief executive Brady Dougan and 17 other veteran managers and directors of the bank for losses on the bonds, which were wiped out by Swiss authorities when the merger with UBS took place on March 19.
Quinn Emanuel, which bills itself as the largest law firm in the world devoted to business litigation and arbitration, had already announced that it is representing a key Credit Suisse AT1 bondholder group in seeking compensation for losses.
The suit on behalf of Axiom and Assenagon from DiCello Levitt, a US law firm with less of an international profile than Quinn Emanuel, could complicate attempts by other bondholders to do a deal with UBS or Swiss regulators.