Parmalat Judge Reaffirms Dismissal of Grant Thornton Cases

A U.S. judge reaffirmed his ruling to take jurisdiction over two suits by Parmalat SpA against accounting firm Grant Thornton LLP, which he later dismissed.

U.S. District Judge Lewis Kaplan in Manhattan today ruled that he was correct in taking the two cases, which were originally filed by Parmalat and its Parmalat Capital Finance Ltd. unit in Illinois state court in 2004 and 2005. Kaplan dismissed the suits in 2009.

In January, a federal appeals court in Manhattan revived the cases, ruling that Kaplan had applied the wrong standard in determining whether to exercise jurisdiction.

The appeals court sent the cases back to Kaplan to determine whether federal law required him to abstain from taking them in favor of the Illinois courts. Kaplan, applying the rule set by the appeals court, said today that he was entitled to rule in the cases.

Parmalat, a dairy company based in Collecchio, Italy, collapsed in December 2003 in the country’s largest bankruptcy, later disclosing more than 14 billion euros ($20.1 billion) of debt, about eight times the amount reported by its former management. Parmalat SpA emerged from bankruptcy and returned to the stock market in 2005.

Enrico Bondi, who was appointed to oversee the Parmalat bankruptcy, sued Grant Thornton, claiming it aided in the fraud that led to Parmalat’s collapse. Parmalat Capital also sued the firm.

The case is In re Parmalat Securities Litigation, 04-cv-1653, U.S. District Court, Southern District of New York (Manhattan).

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