A Collaboration with the University of Pittsburgh

Parmalat fraud suit against Citigroup can proceed: judge

[JURIST] A New Jersey Superior Court judge ruled [PDF text] Tuesday that a $7 billion lawsuit [JURIST report] filed by Italian dairy giant Parmalat SpA [corporate website] against Citigroup [corporate website] could go forward on a claim that Citigroup aided and abetted former Parmalat executives in misappropriating company money. Parmalat has alleged that Citigroup helped obscure the state of Parmalat's finances and helped to move the ill-gotten gains of former Parmalat executives through its bank accounts. Judge Jonathan N. Harris dismissed several of Parmalat's claims, including fraud claims brought under New Jersey's Uniform Fraudulent Transfer Act [statute materials] and racketeering claims brought under the state's Racketeer Influenced and Corrupt Organizations Act [statute materials]. The trial is scheduled for May 5.

Citigroup was among four banking giants indicted [JURIST report] by an Italian judge in June 2007 for not revealing to the market that Parmalat was not financially healthy. Parmalat filed for insolvency in December 2003 after discovering accounting discrepancies totaling nearly $5 billion in debt. AP has more. Reuters has additional coverage.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.