Parmalat makes Deutsche Bank concession
Italian corporate history, Parmalat, the bankrupt Italian dairy
company, has agreed to pay former creditor Deutsche Bank an
additional €26 million, a gesture which could open the door to
similar claims from the remaining Parmalat creditors, writes Tom
Enrico Bondi, the Italian government-appointed administrator in charge of turning around the collapsed dairy group after its bankruptcy last November, has so far refused to recognise many banks' claims, subsequently wiping hundreds of millions of euros off Parmalat's supposed debts - recently estimated to be in the region of €14.2 billion.
Furthermore, Bondi has counteracted many compensation claims with lawsuits of his own, charging the banks with failing to provide accurate advice to the company.
But according to a report in the Financial Times today, Bondi has allowed Deutsche Bank to recoup an additional €26 million from the Parmalat insolvency fund - the bank's initial claim was for more than €94.2 million, of which just €16.9 million was agreed by Bondi.
And although this move still leaves €50 million outstanding of Deutsche Bank's claim - relatively little in comparison to claims by other creditors - it represents a considerable softening of Bondi's stance. Indeed, it is his first concession to the large banks and financial institutions embroiled in the scandal.
Bondi's decision to reject claims was centred around the fact that Parmalat creditors continued to keep the company afloat, despite knowing that it was experiencing financial difficulties. His recent decision, however, still does not exempt creditors from future indictment.
Many of the financial groups involved in the affair - including Deutsche Bank - are themselves being pursued in the courts, both by official prosecutors in Milan and by individual investors and trading partners in the US courts.
But regardless of the outcome of any legal decision made on the banks' claim, any negotiated compensation package would be in the form of equity in a new company and not through financial recompense.
Bondi has already signalled his intentions to create a new company from the ruins of Parmalat as early as next year.
The latest development in the Parmalat affair comes less than a week after the Italian prosecuting team sent official notification to five banks that allegedly violated security laws.
The indictment of financial groups Morgan Stanley, Citigroup, UBS, Deutsche Bank and Banca Intesa means they must now present themselves for formal interrogation in later this year.