Parmalat Action Against Citigroup Can Continue, Appeals Court Rules

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

26 April 2005

International banking institution, Citigroup has had its attempt to stall a lawsuit brought against it by collapsed Italian dairy firm, Parmalat dismissed by an US appeals court.

Parmalat's administrator, Enrico Bondi has argued that Citigroup assisted Parmalat's former management team in their attempt to conceal the true state of the company's finances, arranging complex transactions to boost its cashflow and conceal its $18 billion debt.

However, Citigroup has filed a countersuit, claiming that it was one of the victims of fraudulent activities undertaken by the dairy giant, which included inventing assets in a fictitious Cayman Islands hedge fund and forging documents to make it appear that Parmalat had $4.9 billion in a Bank of America account.

In a ruling delivered on Monday, the appeals court rejected Citigroup's attempt to put the case on hold while it continues its efforts to have the Parmalat suit against it dismissed completely.

Speaking the Associated Press on behalf of Mr Bondi's legal team, Marc Greenwald announced that:

"This ruling confirms the case is properly filed in New Jersey and we will now press ahead with discovery and proving our case in court."

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