(Bloomberg) -- UBS Group AG could face a lawsuit from bond investors over its role arranging a 2017 sale of Swiss franc-denominated debt for retailer Folli Follie Group that has since defaulted.
Alcimos, a services company, has hired law firm Quinn Emanuel Urquhart & Sullivan to pursue a potential compensation case in Swiss courts on behalf of investors. Folli Follie has been struggling to survive since a short seller questioned the accuracy of its financial statements last year, triggering a bond and share price collapse.
Read more: Folli Follie Owner Shares Slump as Short Seller Questions Reach
If financial statements in the prospectus of the 150 million swiss franc ($151 million) bonds contain inaccuracies, investors may have a claim against UBS, according to Volker Rosengarten, a partner at Quinn Emanuel.
He added that the law firm is in advanced talks with bondholders representing around 30% of the Swiss franc bonds.
A spokesman at UBS declined to comment. Alcimos, an independent firm not invested in the notes, will win a fee if the process is successful. Officials at Folli Follie did not immediately respond to a request for comment.
Bondholders are being offered 28% of their investments under a restructuring proposal aimed at keeping the Greek company out of insolvency.
The retailer, which discovered its Asia sales were overstated by 90%, also has 249.5 million euros in defaulted bonds that were issued in 2014, three years before the Swiss franc debt.
Read more: Folli Follie Says Probe Found Asia Sales Overstated by 90%
To contact the reporter on this story: Irene García Pérez in London at igarciaperez@bloomberg.net
To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Irene García Pérez, Chris Vellacott
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