Citi Loses Bid to Dismiss Parmalat Suit

The bank is one about 50 defendants accused by Parmalat chief executive Enrico Bondi of helping the Italian company's prior management hide debt and inflate results.

New Jersey’s Supreme Court rejected Citigroup’s motion to dismiss a $10 billion lawsuit by Parmalat, according to the Italian dairy company.

The court reportedly upheld a January ruling by Bergen County Superior Court Judge Jonathan Harris, who turned aside the bank’s argument that Parmalat had brought the lawsuit in the wrong forum, reported Reuters. According to the wire service, Citigroup had argued that New Jersey was not equipped to deal with the case, did not have key witnesses and documents, and should not be forced to interpret Italian law.

In 2004, the bank became one about 50 defendants accused by Parmalat chief executive Enrico Bondi of helping the Italian company’s prior management hide debt and inflate results; Bondi has since obtained more than $700 million in settlements, according to Reuters.

“Citigroup has done nothing wrong, and we look forward to being vindicated,” bank spokesman Daniel Noonan told the wire service. Indeed, later in 2004, Citigroup asserted in a court filing in Parma, Italy, that Bondi “has presented no credible evidence that substantiates his allegations of wrongdoing” and that his lawsuit “relied on a collection of fundamental misrepresentations, misunderstandings and factual errors.”

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