Parmalat Asks US Court For Protection During Restructuring

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

24 June 2004

Collapsed Italian dairy giant Parmalat on Tuesday asked Manhattan's bankruptcy court to protect its US assets whilst it is in the process of restructuring.

The firm on Monday submitted its plans for recovery to Italian Industry Minister, Antonio Marzano, and is now awaiting approval of its proposals.

Speaking to Reuters with regard to the dairy group's request to block its creditors from interfering with the restructuring process, Fulbright and Jaworski partner, Bill Rochelle explained that:

"The practical effect of filing a 304 case is to force US creditors to participate in the proceeding in Italy, whether they like it or not." He went on to add that:

"Some creditors think they might otherwise fare better in the US."

In its court filing, Parmalat argued that timely completion of its rescue plan is dependent on the ability of petitioners to present the firm with a practical solution by which to satisfy and restructure its outstanding obligations."

"To this end," the firm's Italian lawyer, Francesco Gianni observed: "it is essential that no one creditor under the Italian plan is able to gain unfair preference over other such creditors by recovering prematurely in the United States on account of a claim addressed under the Italian plan."

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