GT battles insurers over Parmalat liability cover

Brit Insurance faces a House of Lords battle in March as
Grant Thornton International
attempts to force the insurer to pay out on the firm’s cover in relation to

The international network had been denied cover in an earlier court case,
because its former Italian member firm, Italaudit, did not claim under the

The case is the latest in the ongoing fallout from Parmalat’s collapse, as
investment banks face charges in Milan over their involvement in the company’s
The GT network was treated as a member of the firm’s policy, but because the
Italian branch failed to disclose litigation with Parmalat, Brit refused to
cover GTI.

The Parmalat scandal hit the headlines again this year as Deloitte’s €76m
(£57m) settlement proposal was put forward to Parmalat bondholders, and the
trial began against four investment banks over their role in its collapse.
Citigroup, Deutsche Bank, UBS and Morgan Stanley face trial in Milan after
continuing to lend to the group as it collapsed.

Last year a US judge threw out claims against the auditors and bankers of
Parmalat. Judge Lewis Kaplan said that the majority of the alleged wrongdoing
attributed to the banks and auditors occurred outside the jurisdiction of the
US, so the defendants did not have to face charges.

Judge Kaplan had already thrown out cases against Deloitte & Touche’s US
and Italian units, GTI’s US business, Bank of America, Italy’s Banca Nazionale
del Lavoro SpA, and units of Credit Suisse Group.

The failed cases were brought by the administrator for Parmalat USA and the
litigation trustee for its Farmland dairies unit, both former US subsidiaries of

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