Courts continue to favour Parmalat
insolvency after emerging victorious yesterday from another set of
legal disputes over responsibility for its financial collapse in
The company has now reached settlements with a number of European financial institutions in its ongoing fight to regulate the billions lost in 2003, when the company defaulted on more than €14 billion in debt. The group revealed that it had settled disagreements though revocatory action with both Banca Monte Parma and ING Bank, having been rewarded €35m and €8m respectively by the courts. It was also granted €29,093,000 from Merrill Lynch, though both companies continue to hold contrasting points of view regarding the insolvency. The decision could set a precedent for business in the future, with the possibility of punishment for financial groups shown to have had awareness and yet not acted on a client's misfortune. The latest verdicts continue a spectacular reversal of fortunes for Parmalat. Under its feted chief executive Enrico Bondi, the company has followed a strategy to recoup the billions it lost in the financial scandal and two years of Italian government administration. With Bondi at the helm, Parmalat has worked to stave off efforts by an Italian banking conglomerate to disintegrate the group, and has initiated various legal proceedings in Europe and the US against banks allegedly involved in the fraud. Bondi's argument is that a number of financial institutions knew about the fraud and were partly responsible. However, the financial institutions involved in the 2003 affair have largely maintained that they were fooled by Parmalat's accounting chiefs. The situation is not likely to improve for companies involved with the company though, as further action against Citigroup, UBS, Deutsche Bank and Morgan Stanley were announced by an Italian judge last week. All four groups deny responsibility.