Deloitte & Touche SpA, the Italian arm of the Big Four firm, will pay Parmalat $149 million to settle investor claims accusing the firm of contributing to the Italian dairy company's collapse in December 2003.
Parmalat chief executive Enrico Bondi has accused dozens of businesses and financial institutions of helping former management inflate financial results. Parmalat collapsed at the end of 2003 under $14 billion in previously hidden debt, and nearly a dozen executives were sentenced to serve jail time.
Bondi has already obtained more than $700 million of settlements from litigation in the United States and Italy and is on the hunt for billions more. The company has brought lawsuits against Deloitte Touche Tohmatsu (the firm’s parent company), Bank of America, Citigroup and Grant Thornton International for $10 billion each.
The settlement is the first involving the defendants since Judge Lewis Kaplan (who is, separately, handling the massive federal tax shelter case involving former KPMG executives) adjourned the lawsuits last year and urged the parties to settle by the close of 2006. Citigroup’s case is being handled in a New Jersey state court.
Parmalat has since relisted in Milan after a restructuring.
The settlement also covers Dianthus, an accounting firm that operated in Italy under the Deloitte name until July 2003. Just last month, Deloitte's U.S. arm, Deloitte & Touche LLP, agreed to pay $210 million to resolve claims related to Adelphia Communications Corp.
