The first of many expected class action lawsuits has been launched the against scandal-hit Italian food group Parmalat with New York’s Milberg Weiss Bershad Hynes & Lerach leading the charge.
The $1bn (£549m) lawsuit, launched yesterday (January 5) on behalf of institutional investor Southern Alaska Carpenters Retirement Trust, alleges a number of individuals, including Parmalat’s lawyer Gian Paolo Zini of Zini & Associates, perpetrated a massive fraud scheme.
The charges state that “senior insiders” i.e. founder Calisto Tanzi and chief financial officer Fausto Tonna as well as “legal, accounting and financial advisors” diverted $1bn of the company’s money through a series of methods.
These include, according to the suit, “the creation of bogus bank accounts”, “the use of forged financial records” and “the manipulation of Parmalat’s balance sheet and income statement”. Parmalat hit the headlines in December when it revealed a €4bn (£2.7bn) in a Cayman Island-based account.
Zini, the company’s lawyer, is part of a group of executive and advisors currently under arrest in connection with the alleged fraud.
Once part of Pavia e Ansaldo, one of Italy’s last remaining independent law firms and a best friend of Herbert Smith, Zini left in 2000 to set up his own practice.
Initially spanning Milan and New York, the firm soon expanded into Rome and in July 2001 announced plans to open in London within the following six months. However the UK office never materialised.
It has also emerged that Parmalat has retained Weil Gotshal & Manges as counsel with co-head of the firm’s restructuring group Marcia Goldstein and UK-based partner Chris Mallon, head of the department in London, heading up the case.
Lazard has been drafted in as the company’s financial advisor. Gianni Origoni Grippo & Partners is acting for Parmalat in Italy.
Canadian bondholders in Parmalat are being represented by Debevoise & Plimpton while a group Brazilian bondholders have retained Cadwalader Wickersham & Taft. Bingham McCutchen is acting for the largest group of bondholders in Parmalat.