Parmalat Creditors Unable To Defend Themselves Against US Lawsuits

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

01 December 2004

US creditors of collapsed Italian dairy firm, Parmalat have taken issue with an injunction designed to prevent them from pursuing their claims outside of the Italian bankruptcy process, arguing that they are unable to defend themselves against claims that Parmalat has filed against them in the United States.

In court filings relating to the injunction granted by Judge Robert Drain in New York in July, which denies creditors the right to seek claims or make discovery requests in the United States, creditor and lawsuit target Bank of America argued that:

"The Preliminary Injunction should be modified to allow Bank of America to assert a vigorous defense against Bondi's transparent effort to shift attention away from Parmalat's extensive fraud by claiming that Bank of America would knowingly lend and risk hundreds of millions of dollars to a company engaging in a massive fraud to earn a few million dollars in fees and interest."

Accounting firm, Grant Thornton, which is also facing an action brought by Parmalat administrator, Enrico Bondi, has joined forces with Bank of America to seek a modification of the injunction, suggesting that Bondi is "using this protective mechanism as a sword instead of a shield".

Recommended