(Adds comment from lawyers, details, background)
By Stephen Jewkes and Elisa Anzolin
MILAN, Sept 4 An Italian court has upheld a
ruling by a U.S. court for Italy's Parmalat to pay
Citibank $431 million in damages in a case relating to the
dairy group's bankruptcy more than 10 years ago, lawyers for the
U.S. bank said on Thursday.
Parmalat collapsed in 2003 after the discovery of a 14
billion euro ($18 billion) hole in its accounts. At the time it
was Europe's biggest bankruptcy and its demise wiped out the
savings of more than 100,000 small investors.
In 2008 the Superior Court of New Jersey threw out a lawsuit
brought by Parmalat claiming Citibank had played a part in
thefts that had helped bankrupt it.
Instead the court ruled Parmalat had to pay the New
York-based bank damages for false statements and fraud.
"Following the demand by Citibank for recognition (of the
U.S. ruling) in Italy, the Bologna Court of Appeal has now ruled
that the U.S. sentence be recognised in Italy against
Parmalat...", Citi's lawyers Clifford Chance said.
Parmalat emerged from bankruptcy and returned to the Italian
stock market in 2005 after a two-year reorganization.
In 2011 it was taken over by French dairy company Lactalis
in a 4.3 billion euro deal.
Citibank now has to file an application with the Parma
bankruptcy court in Italy asking it to verify its claim, the
If the claim is upheld by the Parma court the damages will
have to be paid to the U.S. bank in Parmalat shares.
It was not clear if the whole amount would have to be paid
or only a part. Lawyers for Clifford Chance said there was a
chance that Parmalat would be called on to pay the full amount
of $431 million.
Parmalat said the company had the right to appeal the
decision to the Italian supreme court.
(1 US dollar = 0.7680 euro)
(Reporting by Stephen Jewkes; editing by Oleg Vukmanovic and