Hundreds of CS small shareholders are today filing a lawsuit against the takeover by UBS. Professor of business law, Peter V. Kunz, classifies what the current lawsuit means for UBS – and which one is the most promising.
Peter V. Kunz
Business Lawyer
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Kunz is Professor of Business Law at the Law Faculty of the University of Bern and was its Dean until 2020.
SRF: What is the lawsuit filed by CS shareholders today about?
Peter V. Kunz: The primary issue is that the CS shareholders want compensation for the fact that their shares were transferred to UBS for a lower value. You received a financial loss of around 70 percent as a result of the Federal Council’s intervention. They now want compensation for this.
I would like to say that the chances of success are well below 50 percent.
What is the significance of this lawsuit for the takeover of CS by UBS?
This lawsuit will not challenge the merger as such. That’s already done. But it could be more expensive for UBS. Ultimately, UBS will be charged. Should UBS lose, then it would have to pay a value compensation to the CS shareholders, which the Federal Council has set lower. For UBS it is about four billion Swiss francs.
How do you rate the chances of success of this lawsuit?
I’m very skeptical. I would like to say that the chances of success are well below 50 percent.
For what reason?
On the one hand, there are complicated legal issues that have never been decided by a court in Switzerland. In particular, the Bundesrat’s emergency law would have to be abolished, so to speak. On the other hand, it would actually take courageous, creative and adventurous judges who want to make such a judgment. So I guess we don’t have that.
There are other complaints as well. Which ones do you consider promising?
In this specific case, it is of course the case that the shareholders of CS in particular could also take action against the Federal Council. UBS does not simply take over CS cheaply because it was forced to do so, but the Federal Council actually caused it.
In particular, the so-called AT1 lawsuit, which is currently pending at the Federal Administrative Court, could become even more expensive for UBS.
Against this background, state liability lawsuits against the Federal Council are certainly an interesting topic.
Are there any other lawsuits?
In particular, the so-called AT1 lawsuit, which is currently pending at the Federal Administrative Court, could become even more expensive for UBS. It’s about 16 billion Swiss francs. I also consider this to be more promising because, in my opinion, the conditions for Finma to be able to write down to zero are at least not obviously met.
How long will it take until final legal certainty is established for the takeover?
I suspect it will all take three to four years in the end. On the one hand, it is about the possible compensation for CS shareholders, but also about the processes that have been pending by certain creditors, the AT1 holders. That will take a few years.
The interview was conducted by Celina Schnyder.