Parmalat Banks Another Big Settlement

Italy's number-three bank will pay $118 million to end a lawsuit charging it with fraud and incompetency relating to the company's accounting scandal and bankruptcy.

An Italian bank has agreed to pay Parmalat, the Italian dairy producer, $118 million to settle fraud and incompetency claims resulting from the company’s massive accounting scandal and 2004 bankruptcy.

Banca Monte dei Paschi di Siena, Italy’s third-largest bank, is only the latest to give in to Parmalat CEO Enrico Bondi. He sued dozens of the company’s former banks, charging that they should have known about the true state of its finances and that they helped former managers perpetrate fraud. So far Bondi’s efforts have brought in more than $1 billion in settlements, according to a report by Bloomberg, the newswire service.

Parmalat announced last June that it had settled civil lawsuits with three major international banks for more than $96 million. Merrill Lynch agreed to pay $39 million, Banca Monte Parma $46.91 million, and ING Bank $10.72 million.

In January 2007, Deloitte & Touche and Dianthus SpA, a company that had operated in Italy under the Deloitte name until July 2003, agreed to pay the company $149 million.

Last month, the auditing firm also reached a settlement with a committee representing Parmalat bondholders, who will receive up to 6 percent of the nominal value of their investments made before Nov 11, 2003. Yet Deloitte and Dianthus still deny any participation in or knowledge of the fraud.

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