Two former auditors of Parmalat SpA agreed to pay $15 million to settle a class-action lawsuit by U.S. equity investors over their roles in the Italian dairy company’s 2003 collapse.
Deloitte Touche Tohmatsu will pay $8.5 million and Grant Thornton International will pay $6.5 million to settle, documents filed Thursday with in Manhattan federal court show.
The case was brought by several funds on behalf of thousands of investors who said they lost money from Parmalat’s multi-billion-dollar fraud.
“It is very rare that worldwide coordinating audit networks enter into settlements like what we have,” said James Sabella, a lawyer at Grant & Eisenhofer PA in New York representing the investors, in an interview.
Lead plaintiffs include Hermes Focus Asset Management Europe Ltd, Cattolica Partecipazioni SpA, Capital & Finance Asset Management, Societe Moderne des Terrassements Parisiens and Solotrat, court documents show.
Deloitte and Grant Thornton did not immediately return calls seeking comment.
The settlement requires approval by U.S. District Judge Lewis Kaplan, who has overseen much of the Parmalat-related litigation in the United States. Sabella said approval could come in the first quarter of 2010.
Parmalat’s collapse sparked litigation worldwide against dozens of banks, including Bank of America Corp and Citigroup Inc, by current Parmalat management and by investors.
Deloitte agreed in January 2007 to pay $149 million to settle with Parmalat itself. Parmalat has appealed Kaplan’s dismissal in September of its lawsuit against Grant Thornton.
The U.S. equity investors believed they suffered $138.2 million of damages, but Sabella said their claims might have been reduced by earlier settlements. He also said taking their case to a jury could have been “full of difficulties.”
Burdened by about 14 billion euros ($20.9 billion) of debt, Parmalat filed for insolvency protection in Italy in December 2003, after uncovering a 4 billion euro ($6 billion) hole in its balance sheet. Parmalat was restructured and relisted on the Milan bourse in 2005.
The case is In re Parmalat Securities Litigation, U.S. District Court, Southern District of New York, No. 04-1653. (1 euro = $1.492)
(Reporting by Jonathan Stempel; Editing by Tim Dobbyn)
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