Parmalat’s U.S. Suits Against Grant Thornton ReinstatedAndrew Harris
Parmalat SpA’s U.S. representatives won the reinstatement of decade-old litigation accusing accounting firm Grant Thornton International of contributing to the Italian dairy giant’s bankruptcy.
A lower-court judge exceeded his authority when he threw out the cases last year, the U.S. Court of Appeals in Chicago said today. The judge had been told by an appeals court in New York to return the cases to Illinois state court, where they were filed, and shouldn’t have dismissed them, the Chicago appellate panel said.
Parmalat sought protection from creditors in December 2003 after an accounting scandal. It completed its Italian reorganization in October 2005.
The dairy company, based in Collecchio, Italy, disclosed more than 14 billion euros ($20 billion) of debt when it filed for bankruptcy, about eight times the amount reported by its former management.
In the U.S., Parmalat’s representative sued Grant Thornton in Illinois state court, saying the accounting firm contributed to the collapse of the company by conducting fraudulent audits.
The cases are Parmalat Capital Finance Ltd. v. Grant Thornton International, 13-2245, and Bondi v. Grant Thornton International, 13-2253, U.S. Court of Appeals for the Seventh Circuit (Chicago).