Credit Suisse and the Fdration Romande des Consommateurs announced an agreement regarding compensation for clients with capital-protected products from Lehman Brothers.
Under this agreement with the Fdration Romande des Consommateurs (FRC), Credit Suisse will, as a gesture of goodwill and without acknowledging any legal obligation, make a redemption offer to the clients represented by the FRC who had assets of up to CHF 500,000 with Credit Suisse as of August 31, 2008, and who had invested over 20% of those assets in 100% capital-protected Lehman products. The offer will be based on an analysis of the individual situation of each client represented by the Fdration Romande des Consommateurs and attorney Matteo Pedrazzini, and will cover between 50% and 70% of the nominal value of the redeemed products. Moreover, in certain hardship cases, Credit Suisse will also make a redemption offer to clients who do not fully meet the redemption offer criteria defined with the Fdration Romande des Consommateurs but who are experiencing financial or personal distress due to losses on capital-protected Lehman products.
In addition, Credit Suisse will make the same offer to all of its clients in Switzerland who had assets of up to CHF 500,000 with Credit Suisse as of August 31, 2008, and who had invested over 20% of those assets in 100% capital-protected Lehman products. Credit Suisse will contact clients directly.
Consequently, Credit Suisse will make redemption offers worth a total of approximately CHF 50 million to around 1,700 clients for capital-protected Lehman products.
“Client trust and satisfaction are paramount for Credit Suisse, says Walter Berchtold, chief executive officer private banking. We fully understand the difficult situation faced by clients as a result of Lehman Brothers’ declaration of bankruptcy, and began early on to seek ways of accommodating them. In an intensive, constructive dialogue in recent weeks with the Fdration Romande des Consommateurs, we have sought a application for affected clients. We are pleased to be in a position to announce an extensive agreement today.”
This agreement supplements the measures taken in an initial step to compensate affected clients. Credit Suisse reacted immediately after Lehman Brothers declared bankruptcy, and analyzed the situation of the affected investors. Examining each individual case according to objective criteria was a priority for Credit Suisse. As a first step, Credit Suisse decided to accommodate clients who were particularly affected, and defined clear criteria for this purpose. The bank made a redemption offer to those clients who had assets of up to CHF 500,000 with Credit Suisse as of August 31, 2008, and who had invested more than 50% of those assets in 100% capital-protected Lehman products.
Together with this agreement, Credit Suisse is, as a gesture of goodwill and without acknowledging any legal obligation, making an individual redemption offer worth a total of approximately CHF 150 million to over 3,700 clients.
Credit Suisse continues to provide support to all clients who have been affected. This includes helping them, if requested, to assert claims in connection with the insolvency proceedings of Lehman Brothers.
D.C.