Lawyer says Italian court allows Parmalat to sue Citigroup
( AP ) - Parmalat will seek damages of more than $16 billion from Citigroup Inc. after an Italian court allowed the dairy company to attach a lawsuit to a criminal trail, a Parmalat lawyer said Monday.
Lawyer Marco De Luca confirmed Italian news reports that the court granted permission for lawsuits to be attached to a fraudulent bankruptcy trial being held in Parma.
The multinational juice-and-dairy producer collapsed in 2003 in a huge fraud case.
The trial in Parma against some officials from Citigroup is one of several court cases spawned by the scandal.
"We are confident that the judicial process will continue to vindicate Citi because the allegations against Citi and its representatives are baseless. Citi continues to deny any liability whatsoever," the bank said in a statement.
In separate proceedings, Parmalat's founder and other former top executives face charges including criminal association.
Last week, in separate proceedings, a judge in Milan ruled that Parmalat will not be able to seek damages in the Milan trial of five international banks charged with alleged market rigging in the company's collapse. Among the five banks is Citigroup Inc. Citi Italia said it was pleased with that decision.
That trial is the first seeking to assign lenders part of the responsibility for Europe's largest corporate failure.
Parmalat emerged from bankruptcy in 2005, and has recouped some $2 billion from banks in settlements.
Parmalat's clean image as a business selling milk, juice and baked goods in 30 countries masked a tangled financial web that unraveled when the company acknowledged a crushing debt of 14 billion euros, eight times higher than previously claimed.
The Parmalat failure is also the subject of civil cases in the United States.