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November 21, 2007 |
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PARMALAT SPA: Italian Prosecutors Pursue BofA Link Evidence In connection with continuing investigations on Parmalat S.p.A.'s collapse, Gerardo La Guardia, chief prosecutor in Parma, Italy, said that Italian prosecutors can prove the existence of a direct link between former Parmalat Chief Financial Officer Fausto Tonna and former Bank of America Manager Luca Sala. According to Reuters, Mr. La Guardia disclosed that the magistrates have evidence of bank transfers by the former officers, which he believed would prove part of the bank's management was aware of Parmalat's situation before it tumbled under EUR14,000,000,000 of debts in 2003. The transfers made to a Swiss bank account allowed some of the management to profit, Mr. La Guardia said. Mr. Tonna purportedly denied any involvement with Mr. Sala, who worked with Parmalat when he was head of corporate banking at BofA in Italy. Mr. Sala, who moved to Parmalat as a consultant in 2003, is on trial in Milan for market manipulation, false communication and acting as an obstacle to surveillance activities, Reuters reports. BofA has also denied that its managers were aware of Parmalat's situation before it fell apart. Investigations on the matter were continuing, Reuters says. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/ -- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court Granted Parmalat Permanent Injunction. (Parmalat Bankruptcy News, Issue No. 94; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). |
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