US judge approves most of Parmalat suit

NEW YORK - Parmalat Finanziaria SpA's administrator may pursue his US$10 billion ($14.97 billion) lawsuit against the collapsed Italian dairy company's former auditors Deloitte & Touche and Grant Thornton, a New York federal judge ruled on Thursday.

The ruling is a setback for the auditors' global organisations, which had moved to dismiss the case in part on grounds that they weren't legally responsible for the actions of their Italian operations.

Parmalat's administrator, Enrico Bondi, charged that the Italian units helped Parmalat insiders perpetrate fraudulent accounting that led the company into insolvency.

District Judge Lewis Kaplan of the US Court in Manhattan, however, dismissed Bondi's attempt to claim a further US$10 billion from the auditors on behalf of Parmalat shareholders.

The judge also threw out Bondi's claims against the auditors' US units, and dismissed some charges that the auditors stole corporate assets and helped Parmalat insiders fraudulently transfer company property.

Parmalat, which operates dairies all over the world, filed for insolvency in December 2003 under the weight of about 14 billion euros ($25.31 billion) of debt, after learning of a 4 billion euro hole in its accounts.

Kaplan gave Bondi until August 8 to file an amended complaint.

On Wednesday, the judge threw out an investor lawsuit accusing Bank of America Corp of helping Parmalat commit securities fraud. He left intact some claims against three banks: Citigroup Inc, Italy's Banca Nazionale del Lavoro SpA and Credit Suisse Group Inc.


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