Home -> Law Blog Directory -> Legal News Blogs -> JURIST - The Paper Chase

Legal News

: JURIST - The Paper Chase

Parmalat and Bank of America reach $100 million settlement

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] Bank of America (BOA) announced Tuesday that it has reached a settlement with Parmalat SpA in litigation stemming from the 2003 collapse of the Italian dairy giant. Under the terms of the settlement, BOA will pay Pamalat USD $100 million, which includes both cash and non-cash components. The settlement resolves a $10 million lawsuit filed by Parmalat against BOA in 2004 and a counterclaim filed by BOA, alleging the company engaged in fraud and is maliciously suing the bank to shift blame. The two companies filed a joint motion to stay proceedings, and further details of the settlement will become available once it has been filed in the US District Court for the Southern District of New York. In December, an Italian court in Milan sentenced Parmalat founder Calisto Tanzi to 10 years in prison for his role in the company's collapse of the Italian dairy giant. Tanzi was the first executive to be sentenced in connection with the €14 billion fraud scheme in 2003 that bankrupted the company. He was convicted of fraudulent bankruptcy and criminal association for allegedly concealing the company's debt. Seven other defendants were acquitted, including three former BOA employees and the former head of Parmalat Venezuela. An eighth corporate defendant, former Parmalat auditor Italaudit, was fined €240,000 and had €455,000 confiscated. Tanzi was indicted along with approximately 20 other executives in July 2007. Parmalat filed for insolvency in December 2003 after discovering accounting discrepancies totaling nearly $5 billion in debt.

Full post as published by JURIST - The Paper Chase on July 29, 2009 (boomark / email).