Parmalat, the Italian food and dairy company formally owned by the Tanzi family, has lost its fraud case against Citigroup and been ordered to pay $364.2 million in damages.
Parmalat went bankrupt in 2003 after revealing that a $5.34 billion account at Bank of America didn't exist and stating that documents certifying the account were falsified.
When Parmalat emerged from bankruptcy in 2005 under a new management team, it sued Citi for being complicit in helping to bankrupt the company. However, Citigroup said it was a victim of Parmalat's fraud and countersued for damages.
A New Jersey state court jury has now cleared the bank of any wrongdoing and found Parmalat guilty of fraud, negligent misrepresentation and theft.
This is likely to have serious consequences for the Tanzi family who owned 50% of Parmalat before its collapse. Founder and former CEO Carlos Tanzi is currently on trial in Italy on fraudulent-bankruptcy charges.
It is understood that Citigroup must now present the judgment to a bankruptcy court in Italy, which, if authorised in that court, would give the bank millions of Parmalat shares, according to a spokesman quoted by Bloomberg.
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