Grant Thornton LLP and its international parent firm are striking back against a $10 billion lawsuit filed against them by bankrupt dairy giant Parmalat.
Following Parmalat's implosion, its chairman, Enrico Bondi, filed lawsuits in the United States against former outside auditors Grant Thornton and Deloitte Touche Tohmatsu and their U.S. and Italian affiliates, as well as Citigroup and Bank of America, seeking to recover damages stemming from its collapse.
Grant Thornton LLP has filed a motion in Chicago to dismiss all claims brought against it in federal court in the Northern District of Illinois.
"We did not issue any statements or audit opinions on Parmalat, and the legal theory being used in this suit has been overruled as a basis of liability in all similar cases in the U.S.," a spokesman for the firm said Friday. "Grant Thornton LLP has no legal or regulatory exposure in this matter, as the structure of the worldwide organization is such that we do not share profits with, or any liability for the actions of, other member firms or former member firms such as Italaudit SpA, the former Italian member firm."
Grant Thornton's parent firm, Grant Thornton International, also moved to dismiss the $10 billion claim and filed a separate motion to remove a U.S. court injunction blocking counter-claims against the company in the United States, according to published reports. GTI could not be reached for comment at press time, but a spokeswoman for the firm told Reuters, "We want the [New York] legal barrier removed so we have the ability to counter-claim and seek discovery against Parmalat."
The lawsuit, filed in August in Illinois Circuit Court by Bondi, who became chairman of Parmalat in December 2003 after it became insolvent, alleges that the auditors overlooked fraud and looting that nearly led to the company's downfall.
The insolvent dairy firm's unraveling began in December 2003, when it was discovered that a bank account of Parmalat subsidiary Bonlat Financing that was said to have $4.9 billion didn't exist. An audit ordered after the scandal broke put the company's debt at about $18 billion -- eight times more than Parmalat claimed months earlier.
In January, GTI expelled its Italian member firm, formerly Grant Thornton SpA, now known as Italaudit SpA.
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