Grant Thornton wins dismissal of Parmalat case

GRANT THORNTON has won the dismissal of a decade-old lawsuit that accused the auditor of malpractice and fraud that contributed to the collapse of Italian dairy company Parmalat in 2003.

In a 9 April decision, US District Judge John Darrah dismissed the suit on a summary judgement and adopted the findings of previous ruling, Reuters reports.

By adopting the 2009 findings of a Manhattan federal judge in ruling against Parmalat and Enrico Bondi, its foreign representative and former chief executive, Darrah agreed that Parmalat was not excused from a legal doctrine that prevents a company from recovering damages for a fraud in which it was a willing participant.

Darrah said he would retain jurisdiction over the case and rejected attempts to move the case to an Illinois state court. Bondi had argued that there remained disputed issues on whether Illinois law would impose the legal doctrine, known as in pari delicto.

“These cases have remained unresolved for nearly ten years, and it is unlikely that a remand back to state court will result in more timely dispositions,” Darrah wrote in a short opinion. “The entry of summary judgment in favour of defendants should be respected.”

Parmalat filed for insolvency protection in Italy in December 2003 with about €14bn (£11.9bn) of debt, after uncovering a €4bn hole in its balance sheet. In the wake of its collapse, Bondi sued dozens of banks, auditors and others, accusing them of helping insiders loot the company.