$10 BILLION PLUS Parmalat-Bank of America Corp lawsuit Will Proceed

Here's another biggie for the lawyers of Bank of America (BofA). Those folks sure seem to be busy these days (at least in the last two years). Keeping on top of things must be a 28 hour a day job for those folks. I wonder if vacation is a word in their world?

Judge Rules Parmalat May Proceed in Suit:

NEW YORK -- A federal judge has ruled that Parmalat SpA may proceed with its legal action against Bank of America Corp. over the dairy company's financial collapse in 2003, The Associated Press reported Thursday.

Filed in United States District Court in Asheville NC, the lawsuit seeks more than $10 billion in compensatory damages as well as punitive damages. The suit alleges that the Charlotte NC-based bank aided a scheme by bank officials and Parmalat officials between 1998 and 2003.

The ruling by U.S. District Judge Lewis A. Kaplan comes after one-time Parmalat lender Bank of America argued last November it should be dismissed from an amended lawsuit brought by Parmalat Chief Executive Enrico Bondi.

In his order Tuesday, the judge found Bondi had sufficiently stated a claim against Bank of America regarding the bank's alleged failure to disclose the true interest rate of a December 1996 loan to Parmalat Argentina.

The judge also ruled Bondi sufficiently stated his claim against Bank of America regarding the bank's real exposure to a December 1997 transaction with Parmalat Venezuela and a press release Bank of America directed Parmalat to issue allegedly misrepresenting details of a financial move involving Parmalat's Brazilian unit.

However, the judge didn't rule on the merits of those claims, just that Bondi argued them sufficiently enough to proceed.

Based on this language, Bondi stated both claims well-enough for the judge to rule the lawsuit could proceed. Bondi must have broke out the champagne after this ruling! But what are some of the details of this lawsuit?

Parmalat-Bank of America Corp lawsuit banks Enrico Bondi dairy:

(The lawsuit is...) accusing the bank of assisting executives at the Italy-based dairy giant to conceal its debt and insolvency from investors.

Filed in United States District Court in Asheville NC, the lawsuit seeks more than $10 billion in compensatory damages as well as punitive damages. The suit alleges that the Charlotte NC-based bank aided a scheme by bank officials and Parmalat officials between 1998 and 2003.

Bank of America denied any part in Parmalat’s collapse in December 2003, which occurred after the firm said it didn’t have nearly $5 billion it had said was in a Bank of America account. Parmalat subsequently filed for bankruptcy protection.

The suit alleges Bank of America violated the federal Racketeer Influenced and Corrupt Organizations Act, as well as state anti-fraud laws. It (the suit) accuses Bank of America of arranging more than $1.7 billion in funding for Parmalat and its subsidiaries. However, according to the suit, the bank secretly required Parmalat to deposit an amount equal to or more than the loan in another Bank of America account, as cash collateral.(emp.mine)

IMHO: I don't believe you could call the lawsuit frivilous or without merit - as the judge could have ruled in that manner and tossed out the lawsuit - right? So this case, along with the other active BofA cases, will well be worth watching.

And who said the Internet was mindless goo?