Parmalat and Bank of America reach $100 million settlement

[JURIST] Bank of America (BOA) [corporate website] announced Tuesday that it has reached a settlement [press release] with Parmalat SpA [corporate website; JURIST news archive] in litigation stemming from the 2003 collapse of the Italian dairy giant. Under the terms of the settlement, BOA will pay Pamalat USD $100 million, which includes both cash and non-cash components. The settlement resolves a $10 million lawsuit filed by Parmalat against BOA in 2004 and a counterclaim [JURIST reports] filed by BOA, alleging the company engaged in fraud and is maliciously suing the bank to shift blame. The two companies filed a joint motion to stay proceedings [text, PDF], and further details of the settlement will become available once it has been filed in the US District Court for the Southern District of New York [official website].

In December, an Italian court in Milan sentenced [JURIST report] Parmalat founder Calisto Tanzi [NNDB profile] to 10 years in prison for his role in the company's collapse of the Italian dairy giant. Tanzi was the first executive to be sentenced in connection with the €14 billion fraud scheme in 2003 that bankrupted the company. He was convicted of fraudulent bankruptcy and criminal association for allegedly concealing the company's debt. Seven other defendants were acquitted [Corriere Della Sera report, in Italian], including three former BOA employees and the former head of Parmalat Venezuela. An eighth corporate defendant, former Parmalat auditor Italaudit, was fined €240,000 and had €455,000 confiscated. Tanzi was indicted [JURIST report] along with approximately 20 other executives in July 2007. Parmalat filed for insolvency in December 2003 after discovering accounting discrepancies totaling nearly $5 billion in debt.



 

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