* Audit accused of helping Parmalat insiders loot company
* Judge says decade of litigation should end
By Jonathan Stempel
April 11 Grant Thornton LLP won the dismissal of
a lawsuit that accused the auditor of helping enable theft that
contributed to the 2003 collapse of Italian dairy company
U.S. District Judge John Darrah in Chicago, Grant Thornton's
hometown, adopted the 2009 findings of a Manhattan federal judge
in ruling against Parmalat and Enrico Bondi, its foreign
representative and former chief executive.
The Manhattan judge, Lewis Kaplan, agreed with Grant
Thornton and two affiliates that Parmalat was not excused from a
legal doctrine, known as "in pari delicto," that prevents a
company from recovering for its own fraud.
Darrah recently took over the case, and in an April 9
decision rejected Bondi's effort to move it to Cook County
Circuit Court, an Illinois state court.
"These cases have remained unresolved for nearly 10 years,
and it is unlikely that a remand back to state court will result
in more timely dispositions," he wrote. "The entry of summary
judgment in favor of defendants should be respected."
Bondi had argued that there remained disputed issues under
Illinois law that should be addressed.
Thomas Cushing, a lawyer for Bondi, did not immediately
respond to requests for comment.
Known for its long-shelf-life milk, Parmalat filed for
insolvency protection in Italy in December 2003 with about 14
billion euros (US$18.4 billion) of debt, after uncovering a 4
billion euro (US$5.2 billion) hole in its balance sheet.
The Collecchio, Italy-based company was restructured in
2005. It is now 83 percent-owned by privately held French dairy
company Lactalis, following a 4.3 billion euro (US$5.6 billion)
takeover in 2011.
In the wake of Parmalat's collapse, Bondi sued dozens of
banks, auditors and others, accusing them of helping insiders
loot the company. He accused Grant Thornton of helping set up
fake transactions that enabled insiders to steal.
In his 2009 ruling, Kaplan rejected the argument that the
insiders' "looting and squandering even a small portion of
corporate assets" entitled the new Parmalat to recover for the
old Parmalat's wrongdoing.
"Plaintiffs simply cannot get around the fact that Parmalat,
by means of the transactions complained of, raised and spent
millions of euros for corporate purposes," Kaplan wrote. "The
actions of its agents in so doing were in furtherance of the
company's interests even if some of the agents intended at the
time they assisted in raising the money to steal some of it."
Grant Thornton spokesman Tim Blair said the firm was pleased
with Darrah's decision, which reinforces that "Parmalat and its
representatives cannot sue based on their own wrongdoing."
The case is Bondi v. Grant Thornton International et al,
U.S. District Court, Northern District of Illinois, No.