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Last Updated: Thursday, 7 October, 2004, 16:38 GMT 17:38 UK
Parmalat to sue Bank of America
Parmalat milk
Parmalat products are found on most Italian breakfast tables
Administrators at bankrupt Italian food group Parmalat have filed a lawsuit against Bank of America, reportedly claiming $10bn (5.6bn) in damages.

Parmalat said the move was part of ongoing attempts to seek "recovery from third parties believed to have played a central role in Parmalat's collapse".

Similar lawsuits have already been filed against Citigroup, Deloitte & Touche and Grant Thornton.

Parmalat collapsed in 2003 with debts of 14.3bn euros ($17.6bn; 9.9bn).

Aided deception?

"Bank of America assisted certain Parmalat senior managers in structuring and executing a series of complex, mostly off-balance sheet financial transactions that were deliberatley designed to conceal Parmalat's insolvency," the Parmalat lawsuit said.

We believe that the facts do not support a lawsuit against Bank of America and fully intend to vigorously defend ourselves
Bank of America spokeswoman

Bank of America spokeswoman Liz Wood said that while it had not yet recieved a copy of the Parmalat document, "we believe that the facts do not support a lawsuit against Bank of America and fully intend to vigorously defend ourselves".

Parmalat's Italian government-appointed administrator Enrico Bondi has long maintained that financial institutions abetted the company in disguising its true financial state.

He has also accused banks of receiving money from Parmalat at the expense of other creditors, when there were clear indications its finances were worse than the company had stated.

The suit against Bank of America - filed in a federal court in North Carolina - comes a day after Italian bank Banca Intesa agreed to pay about $197m to Parmalat in an effort to avoid court action over bond sales carried out shortly before the dairy company collapsed.

Individuals charged

Other financial institutions facing legal action from Parmalat include UBS, Deutsche Bank and Credit Suisse First Boston.

Parmalat declared it was bankrupt in December of last year after it was forced to reveal a 4bn-euro hole in its accounts.

On Tuesday a Milan court ruled that two former Parmalat auditors should stand trial over their alleged role in the affair.

The court later adjourned before deciding whether 27 other accused individuals would also stand trial.

How Parmalat fell into billions of pounds of debt

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