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Parmalat files suit against Bank of America

Parmalat's government-appointed administrator filed a suit against Bank of America in federal court in North Carolina on Thursday, seeking damages as part of the scandal-stung dairy giant's efforts to recoup money from past dealings with the financial institution.
/ Source: The Associated Press

Parmalat's government-appointed administrator filed a suit against Bank of America in federal court in North Carolina on Thursday, seeking damages as part of the scandal-stung dairy giant's efforts to recoup money from past dealings with the financial institution.

The statement by Parmalat Finanziaria SPA did not say how much money the company was hoping to recover, but Italian news agency ANSA, citing Parmalat legal sources, put the figure at about $10 billion.

A lawyer for Bank of America, Riccardo Olivo, said in Rome that he had not yet seen the lawsuit but that he understood that the $10 billion figure was correct.

While noting that it hadn't yet received a copy of Parmalat filing, the bank said in a statement that "we believe that the facts do not support a lawsuit against Bank of America and full intend to vigorously defend ourselves."

Parmalat said the complaint was part of administrator Enrico Bondi's campaign to legally pursue damages from parties he "contends had a determining role in the collapse of Parmalat" in the fraud scandal.

Bondi has already filed suits for billions of dollars against banks Citigroup Inc., UBS, Deutsche Bank and Credit Suisse First Boston in an attempt to recover money from past deals, including bond seals.

The suit comes a day after the Italian bank Banca Intesa agreed to pay about $197 million to Parmalat in an effort to avoid court action over bond sales carried out shortly before the dairy company collapsed.

The settlement relates to a $368 million bond that Banca Intesa's asset management arm Nextra purchased from the dairy group last summer and sold four months later, Nextra and Parmalat said in a joint statement late Wednesday.

Bondi will present the proposed settlement to Italian Industry Minister Antonio Marzano for authorization within days, the statement said.

The Parmalat crisis exploded in December when the company said it didn't have nearly $5 billion it had claimed was in a Bank of America account. Shortly afterward Parmalat went into bankruptcy protection.

Details of the suit, which was filed in U.S. District Court for the Western District of North Carolina, were not immediately available.

Parmalat officials in Italy provided no immediate details beyond the statement.

Bondi has maintained that financial institutions abetted the company in disguising its true financial state or received money from Parmalat at the expense of other creditors when there were clear indications its finances were worse than the company had stated.

Financial institutions which had dealings with the juice and dairy multinational have described themselves as victims of the company's accounting.