Parmalat sues CSFB
(24 August 2004 – Europe) Embattled Italian giant Parmalat is suing Credit Suisse First Boston for 250 million euros (A$426 million).
Parmalat, which was placed in administration in December 2003 after its 14 billion euro debt was exposed, is attempting to recoup the money from CSFB because the bank underwrote a convertible bond issue in 2002 by a Brazilian unit of Parmalat.
Parmalat’s administrators claimed the sum was paid up front to CSFB to buy the bond’s conversion rights.
However, another accounting firm that investigated Parmalat earlier this year, said the bond had enabled the company’s Brazilian operations to pay off debt and that the amount appeared on the balance sheet as an asset.
CSFB said it would vigorously defend the lawsuit.
Parmalat’s administrators claimed the sum was paid up front to CSFB to buy the bond’s conversion rights.
However, another accounting firm that investigated Parmalat earlier this year, said the bond had enabled the company’s Brazilian operations to pay off debt and that the amount appeared on the balance sheet as an asset.
CSFB said it would vigorously defend the lawsuit.
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