Shareholder Resource Center: Credit Suisse Appraisal

The Credit Suisse appraisal case in Switzerland is a prime example of the “low-hanging fruit” recovery opportunities that FRT monitors for investors. Our team’s efforts in securing favorable registration terms, lower success fees, simplified processes, and improved contract terms have all contributed to increased investor participation in this matter.

UBS has set aside $4 billion for any potential settlements of merger-related legal actions. The claims stem from a hastily organized merger between Credit Suisse and UBS to prevent the former’s collapse, with the takeover purchase price coming in at a tenth of Credit Suisse’s book value.

Three entities have filed representative suits in Zurich Commercial Court on behalf of investors who held Credit Suisse ordinary shares or United States American Depositary Receipts on the date of the UBS merger. The suits seek cash compensation equal to the difference between what UBS paid to acquire Credit Suisse shares and either their fair market value (as determined by the court) or an amount negotiated with UBS.

While all three organizers are still accepting registrations, they have until the end of August to respond to UBS’ latest reply. Settlement negotiations may begin at any time.

Colin Holmes, Associate Counsel at FRT, has been actively discussing this case with our clients and shares key takeaways from those conversations below:

Important considerations for investors:

• These suits are being pursued on a representative basis. Investors have registered their claims with the organizers but are not named parties. Essentially, claimants are waiting on the sidelines while the cases proceed in parallel.
• Some organizers have structured their efforts so that investors are represented on a no-win, no-fee basis, meaning organizers are paid a percentage of any eventual recovery. There is no adverse cost risk to individual claimants participating in this action.
• FRT has worked with organizers to simplify the registration process. Because investors are registered claimants and not plaintiffs, we do not anticipate any additional documentation requirements. There is no risk of deposition or testimony, and investors’ identities will not be publicly disclosed.
• Potential recoveries are difficult to predict. In this case, an investor’s recovery amount will be determined by multiplying the number of shares held on the merger date by the additional amount the court (or settlement) determines those shares should have received (i.e., their fair value) and what they actually received. An investor’s net recovery amount would be the gross recovery less the organizer’s percentage success fees and cost reimbursement.
• The parties could begin settlement discussions at any time. However, we don’t anticipate it happening until after August when the next round of pleadings is due. Should negotiations begin, organizers would likely close their groups. Investors should therefore register sooner rather than later to ensure they can take part in any negotiated settlement.

Colin Holmes analyzes the recovery opportunity for investors here:

Interested in learning more about this case? Use the form below to schedule time with Colin and our team of shareholder recovery experts for a personalized consultation.