Citigroup Files Suit Against New Parmalat Administration

by Ulrika Lomas, for LawAndTax-News.com, Brussels

12 October 2004

Financial services firm, Citigroup announced on Friday that it has filed a suit in a regional court in Rome, arguing that it has been unfairly treated by the administrators of collapsed Italian dairy firm, Parmalat.

In a statement released last week, Citigroup announced that under the terms of the debt-to-equity programme created by government-appointed administrator Enrico Bondi for the consideration of creditor claims against Parmalat, only around EUR2 million in debt due to the bank has been recognised out of the EUR538.7 million in credit claims accepted in relation to the case.

"The law requires that all creditors be treated equally during bankruptcy proceedings, and instead the rights of creditors have been trampled on repeatedly," William J. Mills, Citigroup's European chief executive announced, going on to add that:

"As Parmalat's largest creditor and a victim of this fraud, Citigroup will pursue all opportunities for appropriate redress of its losses."

Separately, Mr Bondi has filed a $10 billion lawsuit against Citigroup, arguing that the US bank assisted the firm's management in disguising debt as equity, thereby hastening its eventual demise.

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