Parmalat secures Morgan Stanley pay-out
settlement as the troubled Italian dairy firm tries to get back on
track amid a hail of law suits, reports Chris Mercer.
Parmalat said the deal "settles all existing and potential actions and claims, including compensation of damages".
The move signals a first victory for Parmalat in its attempt to claw back money from international banks, accusing them of acting irresponsibly by lending to Parmalat when they knew the firm was in financial difficulties.
The man responsible for Parmalat's re-birth, extraordinary commissioner Dr. Enrico Bondi, launched the action against Morgan Stanley in February over a bond buy-back issue in 2003. He sought €135.7m plus interest in damages.
"We are pleased that an institution of Morgan Stanley's stature has decided to contribute to the new Parmalat," said Bondi.
Sir David Walker, chairman of Morgan Stanley International, said: "We are committed to contribute to the re-launch of an important Italian business and it was in our mutual interests to have reached this agreement."
Morgan Stanley also gave up the right to launch counter-claims against Parmalat.
Even so, Parmalat officials may need to supply sleeping bags in courts for its legal team - the dairy firm has filed similar lawsuits against 49 banks and advisors. It may also have to contend with counter-claims, like the one launched recently by CitiGroup.
The lawsuits are an attempt by Parmalat's turnaround team to give the dairy firm a decent start to its second life.
Italian authorities recently gave the firm permission to relist on the stock market - a move that could be on the cards for early autumn this year.
Parmalat imploded in 2003 when a €14bn hole in its accounts was exposed after years of cover-ups.
