Parmalat settles with Deloitte

Parmalat has reached a settlement with Deloitte & Touche and Dianthus over their role in the accounting scandal of 2003.

Deloitte & Touche and Dianthus - the firm that operated in Italy under the Deloitte & Touche name until July 2003 - have committed to provide Parmalat with total consideration valued at $149 million.

The damages actions against the two institutions have now been settled, said Parmalat, as have the counterclaims filed by Deloitte & Touche and Dianthus.

Parmalat has now reached settlements with a number of European financial institutions in its ongoing fight to recoup the billions lost in 2003, when the company defaulted on more than €14 billion in debt.

Under new chief executive Enrico Bondi, the company has followed a strategy to recoup the billions it lost in the financial scandal and two years of Italian government administration.

With Bondi at the helm, Parmalat has worked to stave off efforts by an Italian banking conglomerate to disintegrate the group, and has initiated various legal proceedings in Europe and the US against banks allegedly involved in the fraud.

Indeed, this latest settlement follows years of investigation by Parmalat, and extensive civil discovery by the parties in connection with actions pending in the United States, and was facilitated by various judicial and regulatory authorities.

Under the settlement Deloitte & Touche and Dianthus have an option upon the payment to Parmalat of $15 million to terminate the agreement within 60 days if they do not obtain a contribution bar pursuant to the Illinois Joint Tortfeasor Contribution Act.

Both Parmalat and Deloitte & Touche expressed their satisfaction at the settlement, "which will set in place the conditions for a mutually beneficial future relationship.

"Parmalat and Deloitte & Touche look forward to working together," said the Italian dairy in a statement.

Earlier this month, the Italian dairy giant announced that the cases involving revocatory and damages actions filed by Parmalat against BNL and Ifitalia have also been settled, as have the objections filed in bankruptcy court by Ifitalia.

Under the terms of the settlement, BNL, also acting on behalf of Ifitalia, has committed to pay to Parmalat, €103 million in settlement of revocatory actions plus €9 million in settlement of damages claims.

Following the settlement Parmalat and BNL/Ifitalia have undertaken to withdraw all the pending actions. BNL, Ifitalia and Parmalat each expressed their satisfaction at the settlement.

Bondi's argument has consistently been that a number of financial institutions knew about the fraud and were partly responsible. However, the financial institutions involved in the 2003 affair have largely maintained that they were fooled by Parmalat's accounting chiefs.