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Citigroup : Italian Court Rejects Parmalat Request For EUR 1.8 Bln Compensation

Citigroup Inc. (C) said that an Italian court rejected a 1.8 billion euros civil claim filed by Parmalat SpA against the bank over the food company's collapse in 2003.

The Milan court dismissed a lawsuit filed against the lender and a number of its former employees in June 2015. The court said the claim was a duplication of a case that was dismissed in New Jersey in 2008 and that it shouldn't be allowed to proceed in Italy.

"Citi is very pleased that the Milan court has reached this decision and, in particular, that it has done so at an early stage of the proceedings, without requiring the parties to incur the considerable expense of a full trial on claims that had already been judicially examined and rejected in the United States," Citigroup said.

Parmalat said in a statement it will appeal the decision.

Parmalat had claimed that Citigroup colluded with Parmalat staff to obtain financing for fraudulent transactions before the foodmaker's collapse in Italy's biggest bankruptcy. The company's founder, Calisto Tanzi, later was convicted of misleading investors. French cheesemaker Groupe Lactalis later purchased the dairy company.

Separately, Citigroup is seeking $431 million from Parmalat for credit not repaid. The bank filed a complaint in a New Jersey court, which ruled in its favor. In 2014, an Italian court said that the sentence of the New Jersey Court was recognized in Italy. Parmalat appealed that ruling and a decision is pending.

by RTTNews Staff Writer

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