Italian court orders Parmalat to pay Citibank $431m bankruptcy damages

By Mark ASTLEY contact

- Last updated on GMT

Italian court orders Parmalat to pay Citibank $431m bankruptcy damages

Related tags: Italy, Appeal

Parmalat looks set to pay US banking giant Citibank US$431m in damages after a 2008 US ruling related to the dairy's 2003 bankruptcy was upheld by an Italian court.

Last week, the Bologna Court of Appeal ruled that the penalty handed down by the Superior Court of New Jersey in May 2008 be recognized in Italy by Parmalat.

If approved by an Italian bankruptcy court the damages will be paid to Citibank in the form of Parmalat shares, said one report​.

Parmalat collapsed in 2003 with a reported €14bn hole in its accounts. Scores of Parmalat executives were later charged and convicted for their part in the collapse.

In 2004, Enrico Bondi, appointed by the Italian government to oversee the organization of Parmalat, filed a complaint in the US against Citibank and other defendants that served as investment bankers for the dairy prior to its collapse.

Citibank and the other defendants were accused of “facilitating, covering up and profiting from various improper and illegal financial manipulation.”

Denying all the charges, Citibank raised counterclaims, accusing Parmalat of fraud, breach of warranties, negligent misrepresentation, and conversion.

The majority of the claims made against Citibank by Bondi were dismissed by the Superior Court of New Jersey.

In May 2008, after a 70-day trial, a jury returned a verdict against Parmalat on its remaining aiding and abetting claim against Citibank and ruled in favor of Citibank on its counterclaims.

Last week’s recognition of the Superior Court of New Jersey ruling was issued at the request of Citibank.

A source close the case, who asked not to be named, told DairyReporter.com that Citibank was relieved by the Bologna Court of Appeal ruling.

“Citibank is obviously very happy because it has been accused of being a fraudster​,” said the source.

“The accusation was that Parmalat insiders conspired with directors of Citibank to take actions that were not in the interests of Parmalat.”

“Citibank was a victim of the fraud committed by Parmalat insiders."

The source added that it is “more than likely that Parmalat will take this decision to the Italian Supreme Court.”

Calls made to Parma-based Parmalat by DairyReporter.com last week were not returned.

Related topics: Business, Dairy-based ingredients

Related products

show more

Free booklet: Fat extraction for food analysis

Free booklet: Fat extraction for food analysis

BÜCHI Labortechnik AG | 09-Dec-2019 | Technical / White Paper

Fat extraction is a standard reference method for quality control, labeling and satisfying stringent regulations. "The five essentials of fat extraction...

Know your Ethnic Dairy Opportunities

Know your Ethnic Dairy Opportunities

DuPont Nutrition & Biosciences | 05-Dec-2018 | Technical / White Paper

Global consumers often look for something new from the yogurt category and products with a good story. In Western markets, this demand is driving a trend...

Everything about in-container sterilization

Everything about in-container sterilization

John Bean Technologies (JBT) | 01-Nov-2018 | Application Note

JBT has a long history and an extensive track record in thermal processing of packaged food. JBT retorts and sterilizers are renowned for their outstanding...

Accelerate your supply chain as pressures intensify

Accelerate your supply chain as pressures intensify

William Reed | 04-Oct-2018 | Technical / White Paper

Food, Drink and Non-Food manufacturers are under pressure. Range reviews, massive retail mergers, the backlash against plastic packaging and the ongoing...

Related suppliers

Follow us

Featured Events

View more

Products

View more

Webinars