Grant Thornton, Bank of America Seek to Counter-Sue Parmalat

Grant Thornton and Bank of America are seeking court permission to counter-sue failed dairy group Parmalat, which has filed massive suits against each of the companies.

Former auditors Grant Thornton and Deloitte are facing one $10 billion suit; separate suits seeking the same amount were also filed against Citigroup Inc. and Bank of America.

Reuters reported that Grant Thornton International (GTI) and Bank of America filed motions in a New York court late Thursday that would remove an injunction that bars the companies from counter-suing Parmalat. The company collapsed last December after the stunning revelation of a fake, four-billion-euro account at Bank of America.

Parmalat said on Friday that the accountants and banks were partly responsible for its 14-billion-euro financial hole.

"The scale of the underlying fraud owes much to the failure of the company's closest advisers, which included Bank of America, Citigroup, Grant Thornton and Deloitte," said a spokesman for Enrico Bondi, the government-appointed official responsible for restructuring Parmalat.

Bank of America denies that it played a central role in the scandal. In a statement, the bank said that the motion "argues that Bank of America should be allowed to assert a vigorous defense against Bondi's transparent effort to shift attention away from Parmalat's extensive fraud.”

Court papers argue that Parmalat is "hiding" behind a court order that prevents Bank of America and GTI from taking part in the bankruptcy court proceedings.

"This has nothing to do with hiding behind an injunction," Brian Timmons, a Los Angeles-based lawyer for Parmalat told Reuters. "We would have agreed to amend the injunction if they had only bothered to pick up the phone and ask."

Timmons also said that GTI and Bank of America want to move the lawsuit to New York, where the court may be more sympathetic.

In a separate action, Grant Thornton Inc. also filed a motion in an Illinois court to dismiss Parmalat's $10 billion claim, saying that GTI and the U.S. unit of Grant Thornton LLP are separate from GT SpA. GTI earlier this year separated itself from its Italian unit, once called GR SpA but now called Italaudit SpA.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Already a member? log in here.

Upcoming CPE Webinars

Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.