A US bankruptcy judge has awarded insolvent Italian dairy company Parmalat Finanziaria SpA two-and-a-half more months of protection against creditors' claims, according to the Reuters news agency.

Judge Robert Drain of the US Bankruptcy Court in Manhattan extended to Nov. 17 from Aug. 31 a preliminary injunction blocking some 60 holders of €646m euros ($788 million) of privately placed bonds from pressing their claims while Parmalat reorganizes in Italy.

The extension is the fifth since the injunction was issued on 2 July 2004. It will give Parmalat and its administrator, Enrico Bondi, a chance to address the bondholders' claims at or before a 2-3 November hearing in Parma in Italy.

Bondholders have argued that Italian reorganization procedures are slow and unfair and that Parmalat "ambushed" them by lodging spurious objections to their claims. The fourth extension of the injunction was to expire on Wednesday.

"Even before the July 2, 2004 hearing, the workings of the Italian reorganization process have not always been (clear)," Drain said at a hearing. "Dr Bondi has endeavoured, from time to time, to clarify those workings. (I) don't see a basis for stopping Dr Bondi."

The judge said the bondholders could "obtain appropriate relief here" if Italian claims procedures ran afoul of US bankruptcy principles "down the road."

He also said he hoped Bondi would examine their claims. "I would strongly hope he would not put the creditors through the further expense of showing the obvious," the judge said.

Marcia Goldstein, a partner at law firm Weil, Gotshal & Manges LLP who represents Parmalat, said she was pleased with the ruling, adding: "The judge made clear that any implication that noteholders were misled was quite correct."

Evan Flaschen, a partner at Bingham McCutchen LLP who represents the bondholders, said: "The judge made very encouraging comments on the record that if you lent the money, the claims should be allowed. Hopefully between now and the November hearing in Italy, Dr Bondi and the Italian court will understand and appreciate the basis of Judge Drain's comments."

The bondholder group -- members of which include Goldman Sachs Group Inc, MetLife Inc and private equity firm Cerberus Partners LP -- had asked Drain to end his injunction or create a US procedure for their claims. They also accused Parmalat of trying to block them from participating in a €12bn debt-for-equity swap that would give bondholders more than 50% of a new Parmalat.

But Goldstein told Drain that the Italian court "is on the precipice" of confirming a reorganization plan, in a time period that is "not long by Chapter 11 standards," referring to the US bankruptcy code section governing reorganizations.