(Bloomberg) -- Hedge fund Appaloosa LP became the latest to sue over the $17 billion wipeout of high-risk bonds last year that was part of the deal to save Credit Suisse Group AG from a full-scale collapse.

Appaloosa served as investment adviser to Palomino Master Ltd. and Azteca Partners LLC, who are also plaintiffs in the lawsuit, for their purchases of Credit Suisse debt known as Additional Tier 1 bonds, or AT1s. The funds suffered “significant investment losses” when UBS Group AG bought Credit Suisse and the bonds were written to zero just days after Palomino and Azteca had purchased them in March 2023, according to the complaint filed Tuesday in federal court in Newark, New Jersey.

The investors claim Credit Suisse misled them about its well-being when they bought the notes. 

Credit Suisse’s liquidity position was misrepresented “as very strong and ‘getting stronger’ at a time when there was a run on the bank and Credit Suisse was losing billions of dollars in withdrawals on a daily basis,” according to the complaint.

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A UBS representative didn’t immediately respond to a request for comment. Lawyers for Appaloosa declined to comment.

The complaint is one of many filed over the AT1 bond wipeout. 

The plaintiffs allege violations of securities laws and the New Jersey Racketeer Influenced and Corrupt Organizations Act. They are seeking unspecified damages. 

The case is Palomino Master Ltd. v. Credit Suisse Group AG, 24-cv-05539, US District Court, District of New Jersey (Newark).

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