Ireland’s Eurofood in middle of Parmalat row

ITALY’S Parmalat and Bank of America wrestled over control of an Irish Parmalat subsidiary, Eurofood, at the European Court of Justice yesterday, in a case that could affect the secrecy of off-shore vehicles.

Parmalat collapsed in 2003, driven into insolvency by murky off-shore financing, and is now seeking $10 billion (€8.2bn) damages for alleged fraud from Bank of America, Citigroup, and former auditors Deloitte and Grant Thornton.

A key battleground has been Parmalat’s Irish financing unit, Eurofood, which Parmalat says is central to the fraud paper trail but which Bank of America, a Eurofood creditor, and Irish liquidators have fought to keep in Ireland, while opposing Italian jurisdiction over the unit’s bankruptcy.

“It’s central to our case against Bank of America,” said a Parmalat spokesman. “Eurofood was deeply involved in the fraud at Parmalat and, as such, all the documentation is of interest in terms of getting to the bottom of the scandal.”

“A large portion of the fraud involving Parmalat was at off-shore vehicles where there was little or no transparency.”

Bank of America was not immediately available for comment. The bank has repeatedly denied any wrongdoing in the Parmalat case.

Both sides presented their case at an oral hearing before 13 judges at the European Court of Justice in Luxembourg yesterday.

Judges told the court they would issue a judgement on September 27, a lawyer involved in the case said.

Irish liquidators have argued that Eurofood should be liquidated in Ireland, not in Italy, because it is an Irish-registered company.

The dispute is a test case for the European Union’s Insolvency Regulation, which was meant to simplify cross-border insolvencies.