A New York District Court judge has dismissed claims against
Grant Thornton International and its US subsidiary that arose
following the collapse of Italian dairy company Parmalat.
Judge Lewis Kaplan dismissed the claims against the network and
its member firm, and a third against Bank of America, noting in his
45-page judgement that Parmalat and Parmalat Capital officers had
been acting within the scope of their employment when they engaged
in a massive fraud that ended in the collapse of the company.
“Plantiffs simply can not get around
the fact that Parmalat, by means of the transactions complained of,
raised and spent millions of euros for corporate purposes. The
actions of its agents in so doing were in furtherance of the
company’s interests even if some of the agents intended at the time
they assisted in raising the money to steal some of it from the
company,” Kaplan wrote.
Kaplan also dismissed separate lawsuits
by Parmalat subsidiary Parmalat Capital Finance Ltd against Bank of
America and both Grant Thornton entities.
The decision has been closely monitored
by the accounting profession as courts attempt to establish the
legal line of control between ‘umbrella’ network administration
bodies and member firms.
Grant Thornton International was
dragged into the suit due to the fact its former member, Italaudit,
served as Parmalat’s principal external auditor between 1995 and
1999.
The Italian dairy company collapsed in
2003 following the discovery of one of Europe’s largest frauds. It
involved the understatement of Parmalat’s debts by nearly $10
billion and the overstatement of net assets by $16.4 billion.
Spokespeople for Grant Thornton
International and Grant Thornton US said they were very pleased
with the decision and that throughout the case they remained
confident of their position.
In July, a Miami court judge cleared
BDO International of responsibility for $352 million in punitive
damages and $170 million in compensatory damages awarded against
its US member firm BDO Seidman.
