business

Citigroup Wins Dismissal of $2.2 Billion Claim by Parmalat

Updated on
  • Italian court ruled that claim was duplicate of a U.S. case
  • Parmalat filed claim against Citi and some of its employees

Citigroup Inc. said an Italian court rejected a 1.8 billion-euro ($2.2 billion) civil claim filed by Parmalat SpA against the bank over the food company’s collapse in 2003.

The Milan court dismissed a lawsuit filed against the lender and a number of its former employees in June 2015, according to a statement by New York-based Citgroup and a copy of the ruling seen by Bloomberg. The court said the claim was a duplication of a case that was dismissed in New Jersey in 2008 and that it shouldn’t be allowed to proceed in Italy.

“Citi is very pleased that the Milan court has reached this decision and, in particular, that it has done so at an early stage of the proceedings, without requiring the parties to incur the considerable expense of a full trial on claims that had already been judicially examined and rejected in the United States,” the lender said.

Parmalat said in a statement it will appeal the decision. The company’s shares reversed gains after the news, falling as much as 3.1 percent in Milan -- its biggest loss since March 2017 -- and was trading 1.6 percent lower by 1:50 p.m.

Parmalat had claimed that Citigroup colluded with Parmalat staff to obtain financing for fraudulent transactions before the foodmaker’s collapse in Italy’s biggest bankruptcy. The company’s founder, Calisto Tanzi, later was convicted of misleading investors. French cheesemaker Groupe Lactalis later purchased the dairy company.

Citigroup was represented by Clifford Chance in Milan.

Separately, Citigroup is seeking $431 million from Parmalat for credit not repaid. The bank filed a complaint in a New Jersey court, which ruled in its favor. In 2014, an Italian court said that the sentence of the New Jersey Court was recognized in Italy. Parmalat appealed that ruling and a decision is pending.

(Updates with Parmalat saying it will appeal in 4th paragraph.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE