(Bloomberg) -- Hundreds more Credit Suisse Group AG bondholders sued Switzerland’s banking regulator after their securities valued at about $1.7 billion were wiped out during the lender’s government-brokered takeover by UBS Group AG.

Law firm Pallas Partners, which filed the suit in a Swiss court on April 18, said the Finma agency had no right to order the writedown and is seeking full compensation for its clients — 90 institutional investors and asset managers with $1.35 billion in so-called additional tier-1 bonds, as well as 700 retail and family office clients accounting for some $300 million. 

“This was an abuse of process and the resolution procedure should not be used by Switzerland to enable UBS to take over Credit Suisse to the detriment of AT1 holders,” Pallas founder and managing partner Natasha Harrison said in a statement. 

The latest claims mean that investors representing more than a third of the $17 billion in AT1 bonds issued by Credit Suisse have now sought to get their money back. US law firm Quinn Emanuel Urquhart & Sullivan last month filed a claim in Swiss court representing more than 400 institutional investors who held about $4.5 billion worth of AT1s, and at least two other complaints have been filed.

Created after the 2008 financial crisis, AT1s are the lowest rung of bank debt, producing juicy returns in good times but taking the first hit when a bank runs into trouble. Even shareholders — often the first domino to fall in such situations — salvaged some value from the takeover engineered by Swiss authorities, while Credit Suisse’s AT1 holders walked away with nothing. Many bondholders were furious at the move. European regulators hurried to reassure investors that the Swiss arrangement was an exception. 

Claims on Credit Suisse’s AT1 notes have been quoted at around five cents on the euro in recent weeks, according to people with knowledge of the pricing.

Read more: Call Them CoCos or AT1s, Here’s Why They Can Blow Up: QuickTake

Bondholders have argued that changing the law the day before the notes were written off was unfair and that a process upending the conventions of an insolvency where bondholders take priority over shareholders is wrong. 

However, Finma’s move was covered by emergency legislation enacted the weekend of March 18-19 the deal to rescue Credit Suisse was put together. Defenders of the writedown also point to the fact that the fine print on the bonds always warned that the risk of a writedown to zero was a possibility. 

Finma declined to comment on the Pallas lawsuit. It has previously published its position on the writedown, explaining that it was part of a takeover plan that was the least bad option after Finma and the government rejected a resolution of Credit Suisse or temporary nationalization.

Further lawsuits are expected this week as UBS races to complete the deal. Some law firms have interpreted the 30-day deadline for suits to be April 18, while others believe the 30-day rule to be only working days.

UBS Chairman Colm Kelleher has said he plans to finalize the takeover this quarter, specifically in May. 

--With assistance from Lucca de Paoli.

(Corrects spelling of law firm name in the fourth paragraph in a story first published on May 2)

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