January 21, 2007 / 1:37 PM / 13 years ago

UPDATE 3-Deloitte to pay Parmalat $149 mln to settle suit

(Adds cumulative settlements, paragraph 5)

By Lisa Jucca and Jonathan Stempel

MILAN/NEW YORK, Jan 12 (Reuters) - Accounting firm Deloitte & Touche SpA will pay Parmalat SpA PLI.MI $149 million to settle lawsuits accusing it of contributing to the Italian dairy company’s December 2003 collapse.

In a joint statement released on Friday, the parties said the settlement resolves all litigation between them, and also covers Dianthus SpA, which operated in Italy under the Deloitte & Touche name until July 2003.

“Both Parmalat SpA and Deloitte & Touche SpA express their satisfaction at the settlement which will set in place the conditions for a mutually beneficial future relationship,” the statement said.

Parmalat Chief Executive Enrico Bondi accused some 50 defendants, including Deloitte & Touche parent Deloitte Touche Tohmatsu, of helping prior management hide debt and inflate results, leading to Europe’s largest bankruptcy case.

Bondi has obtained more than $700 million of settlements from litigation in the United States and Italy.

Parmalat has sued Deloitte Touche Tohmatsu, Bank of America Corp. (BAC.N), Citigroup Inc. (C.N) and accounting firm Grant Thornton International for $10 billion each.

The settlement is the first involving these defendants since Judge Lewis Kaplan of the U.S. District Court in Manhattan adjourned the lawsuits against Bank of America, Deloitte and Grant Thornton, and urged the parties to settle by year end.

This adjournment did not cover Citigroup, whose case is being handled in a New Jersey state court.

“We continue to believe that we have a strong case based on its merits,” Grant Thornton spokeswoman Nan Williams said. “We are of course complying with Judge Kaplan’s order directing the parties to mediation, but are not engaged in separate settlement discussions outside that order.”

Bank of America spokeswoman Shirley Norton declined immediate comment. Citigroup and Deloitte were not immediately available for comment.

Parmalat filed for insolvency under the weight of 14 billion euros ($18.09 billion) of debt, after learning of a 4 billion euro ($5.17 billion) hole in its accounts.

The company relisted in Milan in 2005 after a restructuring. Its shares closed down 2.12 percent at 3.271 euros on Friday.

1 euro = $1.292

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