Unlawful write-off of AT1 capital instruments !

In a decision released today, the Swiss Federal Administrative Court (FAC) has ruled that the write-off of CHF 16.5 billion in AT1 bonds of Credit Suisse was not only unlawful but also unconstitutional.

Although this ruling comes in the context of a “pilot case” and can still be appealed before the Federal Supreme Court, it represents an immense and unprecedented first victory for all parties who appealed against FINMA’s decision to order the write-off and possibly a decisive step toward the recognition of AT1 investors’ rights under Swiss law. The question of compensation has been expressly left open by the FAC and will be addressed in the next phase of these proceedings.

This judgment also demonstrates the independence of the Swiss courts from the administrative authorities and honors the integrity and strength of the Swiss judicial system, which has reaffirmed its role as a guardian of legality and constitutional rights.

The official press release of the Federal Administrative Court can be accessed here.

Chabrier (Thomas Goossens and Marc Hassberger and their team, including Emilie Theintz) is proud to represent a large group of appellants challenging FINMA’s decision and to contribute to the broader effort of defending against this unlawful breach of fundamental constitutional rights.

More updates to follow…