Bondi Suffers Setback In Pursuit Of Bank Of America

by Glen Shapiro, LawAndTax-News.com, New York

11 August 2005

Parmalat's administrator, Enrico Bondi last week suffered something of a setback when 10 out of the 12 claims that he had submitted against Bank of America on the collapsed dairy giant's behalf were dismissed.

Although Judge Lewis Kaplan allowed claims alleging breach of fiduciary duty and conspiracy to stand, he threw out fraud, negligence and theft of corporate assets claims.

Bondi had accused the bank, along with several other financial institutions, of helping to cover up the true state of the dairy firm's finances by structuring off-balance sheet transactions "deliberately designed to conceal Parmalat's insolvency".

In a ruling delivered by the same judge at the US District Court in Manhattan last month, Bank of America had securities fraud claims made against it by investors over its involvement with Parmalat dismissed.

Judge Kaplan ruled that the bank's private placement of debt from one of the firm's subsidiaries was not a sham transaction, despite the fact that it was misrepresented in Parmalat's financial statements.

However, similar shareholder suits against Citigroup, Credit Suisse First Boston and Banca Nazionale del Lavoro are set to go to trial.

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