BusinessBusiness RecoveryParmalat to claim back billions from banks

Parmalat to claim back billions from banks

Italian court rules in favour of dairy firm

Debt-riddled Parmalat will be able to claim as much as £5.2bn from banks
following a constitutional court ruling in its favour.

Parmalat launched suits against banks it claimed had been aware it was in a
poor financial state, yet kept earning money through commissions.

Under Italian law a company can claw back money from banks, if they knew the
company was financially weak, before going bankrupt.

As many as 20 banks led by Monte dei Paschi di Siena BMPS and included HBSC
questioned the legitimacy of applying the so-called claw back rule because it
came into effect after Parmalat’s demise.

Parmalat was placed under emergency administration after it was swamped in
?14bn of undisclosed debt in December 2003, but was not actually declared
bankrupt.

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