Citigroup received a setback last week (25 July) when a New Jersey state judge dismissed its counter claim against Parmalat in the US$2.2bn court case being brought against the bank.
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Parmalat is suing Citigroup for damages, alleging that the bank contributed to the Italian food group’s financial collapse.
The dairy company collapsed in December 2003 under EUR14bn (US$22bn) of debt, after uncovering a EUR4bn hole in its accounts. It emerged from bankruptcy in 2005.
Citigroup, the first defendant on trial in the US, has been accused by Parmalat’s new management of assisting in the concealment of corrupt activity by former Parmalat executives. The case began on 15 May.
Seeking damages of $699m, Citigroup launched a counter claim that it was a victim of Parmalat’s fraud.
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By GlobalDataCitigroup spokeswoman Andrea Hurst told Reuters: “Citi is a victim of Parmalat’s fraud, and we are confident the merits of our position will be demonstrated at trial.”
Judge Jonathan Harris of Bergen County Superior Court turned aside Citigroup’s motion for a directed verdict at the trial. It is understood the bank will have an opportunity to present evidence before the case heads to a jury.
Enrico Bondi, Parmalat’s CEO, has been overseeing the turnaround of the group. He has accused some 50 defendants in Italy and the US of helping prior Parmalat management hide debt and inflate results.
A spokesperson for Parmalat told just-food: “We are happy with the announcement made on Friday. It is too early to say anything on how we see the case ending but we are very confident.”
