ZURICH (Reuters) - A group of Credit Suisse bondholders holding $82 million worth of the failed bank's Additional Tier 1 (AT1) debt have filed a lawsuit against Switzerland seeking compensation, U.S. court filings on Thursday showed.
Credit Suisse collapsed in 2023 and was taken over by rival UBS in a rescue orchestrated by Swiss authorities. As part of that operation, Swiss regulator FINMA wrote down about $17 billion of Credit Suisse's AT1s, angering bondholders.
Law firm Quinn Emanuel Urquhart & Sullivan, representing the plaintiffs, said the lawsuit had been filed in the U.S. District Court for the Southern District of New York.
Switzerland's finance ministry declined to comment.
The face value of the AT1 bonds held by the plaintiffs in the suit was over $82 million, the filing showed.
AT1 bonds act as a shock absorber if a bank's capital levels fall below a certain threshold, and have been encouraged by regulators since the 2008-09 financial crisis.
In a statement, Dennis Hranitzky, head of Quinn Emanuel's sovereign litigation practice, said that the lawsuit was seeking full compensation for the bondholders.
"Switzerland unnecessarily destroyed $17 billion of AT1 instruments and thereby unlawfully violated the property rights of the holders of these instruments," Hranitzky said.
UBS last week in Switzerland completed the merger of the main parent companies of UBS and Credit Suisse.