Bondi sues banks, seeks to stifle bias
bankrupt Italian dairy group Parmalat, is set to sue a number of
Italian financial groups in an attempt to stifle mounting criticism
that he has given preferential treatment to domestic banks, Tom
According to a report featured in Italian newspaper Il Sole 24 Ore, Bondi is to instigate legal proceedings against a reported forty five Italian financial institutions in an effort to recover €1 billion - a figure which excludes additional claims for damages and subsequent legal fees.
Although the paper stopped short of revealing the names of the groups involved, it claims legal proceedings would be started against banks, factoring and leasing firms - all of which are alleged to have allowed Parmalat to borrow up to €1 billion in the months prior to its collapse.
Bondi has so far refused to recognise many of former creditors' claims, subsequently wiping hundreds of millions of euros off Parmalat's estimated €14.3 billion debt pile.
Bondi's decision to initially reject claims was centred on the fact that Parmalat's creditors continued to keep the company afloat, despite knowing that it was experiencing financial difficulties.
Until now, large-scale legal action has been directed mainly towards non-Italian financial institutions, including US Citigroup, Bank of America, UBS and CSFB - with the notable exception of Italian Banca Intesa's asset management unit, Nextra, which settled in October after making a €160 million payment to Bondi.
The news comes almost one month after Bondi opted to reconsider a further €1 billion of claims in light of new evidence presented by a number of Parmalat's former creditors - despite initially slashing over €11.6 billion of creditors' original claims by more than €4 billion.
A Parma-based Italian judge, Guiseppe Coscioni, was appointed to lead the first independent assessment of Bondi's actions, although has surpassed last month's deadline to deliver a verdict, claiming he needs more time to examine new evidence.
Coscioni must decide whether to uphold the views of Bondi or those of Parmalat's former creditors, a decision which will ultimately determine who will be the main equity holders in a new company to be started in the New Year.
Regardless of any decision, however, Bank of America and Citigroup will still not be acquitted from Bondi's current $10 billion lawsuits filed in the US, and will also have to face additional existing claims from a number of Parmalat shareholders.
Parmalat administrators have already voiced concerns that the feverous legal backlash, involving both criminal and civil lawsuits, could hamper future restructuring efforts.