Reuters: Bankruptcy News: Grant Thornton wins dismissal of case over Parmalat collapse

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Grant Thornton wins dismissal of case over Parmalat collapse Apr 11th 2013, 19:23 Thu Apr 11, 2013 3:23pm EDT * Audit accused of helping Parmalat insiders loot company * Judge says decade of litigation should end By Jonathan Stempel April 11 (Reuters) - Grant Thornton LLP won the dismissal of a lawsuit that accused the auditor of helping enable theft that contributed to the 2003 collapse of Italian dairy company Parmalat SpA. U.S. District Judge John Darrah in Chicago, Grant Thornton's hometown, adopted the 2009 findings of a Manhattan federal judge in ruling against Parmalat and Enrico Bondi, its foreign representative and former chief executive. The Manhattan judge, Lewis Kaplan, agreed with Grant Thornton and two affiliates that Parmalat was not excused from a legal doctrine, known as "in pari delicto," that prevents a company from recovering for its own fraud. Darrah recently took over the case, and in an April 9 decision rejected Bondi's effort to move it to Cook County Circuit Court, an Illinois state court. "These cases have remained unresolved for nearly 10 years, and it is unlikely that a remand back to state court will result in more timely dispositions," he wrote. "The entry of summary judgment in favor of defendants should be respected." Bondi had argued that there remained disputed issues under Illinois law that should be addressed. Thomas Cushing, a lawyer for Bondi, did not immediately respond to requests for comment. Known for its long-shelf-life milk, Parmalat filed for insolvency protection in Italy in December 2003 with about 14 billion euros (US$18.4 billion) of debt, after uncovering a 4 billion euro (US$5.2 billion) hole in its balance sheet. The Collecchio, Italy-based company was restructured in 2005. It is now 83 percent-owned by privately held French dairy company Lactalis, following a 4.3 billion euro (US$5.6 billion) takeover in 2011. In the wake of Parmalat's collapse, Bondi sued dozens of banks, auditors and others, accusing them of helping insiders loot the company. He accused Grant Thornton of helping set up fake transactions that enabled insiders to steal. In his 2009 ruling, Kaplan rejected the argument that the insiders' "looting and squandering even a small portion of corporate assets" entitled the new Parmalat to recover for the old Parmalat's wrongdoing. "Plaintiffs simply cannot get around the fact that Parmalat, by means of the transactions complained of, raised and spent millions of euros for corporate purposes," Kaplan wrote. "The actions of its agents in so doing were in furtherance of the company's interests even if some of the agents intended at the time they assisted in raising the money to steal some of it." Grant Thornton spokesman Tim Blair said the firm was pleased with Darrah's decision, which reinforces that "Parmalat and its representatives cannot sue based on their own wrongdoing." The case is Bondi v. Grant Thornton International et al, U.S. District Court, Northern District of Illinois, No. 04-06031. Link this Share this Digg this Email Reprints

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