ITALY/UK -Parmalat, the Italian food group, is suing Hermes Focus Asset Management Europe for more than €5bn in damages on the grounds of that it worsened the "financial distress" relating to the firm's collapse in 2003. 

The company confirmed in its annual report for 2007 that the lawsuit, filed in Parma, Italy, is seeking €758.2m in damages on behalf of Parmalat SpA, and a further €4.3bn for Parmalat Finanziaria SpA.

However, a lawyer for Hermes said: "We consider the claim to be groundless - it comes after years of Hermes suing Parmalat in Italy and in the US to recover losses made in its funds."

The Italian company claims Hermes was responsible for "worsening of the financial distress" resulting from its collapse in December 2003, when it was revealed that a bank account believed to be worth €4bn did not exist.

However, since then Parmalat has been at the centre of numerous legal cases, including a US class action filed against the company, and a number of banks and corporate advisers, in 2004, for misleading investors in what the lawyers involved described as "one of the largest and most egregious corporate financial frauds ever".

The lead plaintiffs in the case, which include Hermes, agreed a $50m partial settlement with two of the defendants - Banca Nazionale del Lavoro (BNL) and several Credit Suisse entities - in July last year. [See earlier IPE.com story: Court approves first Parmalat settlement]

However, according to documents on the official class action website, the settlement is being held in escrow as the case against the remaining defendants, including Parmalat S.p.A is still pending in a New York court.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com


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