LAWFUEL – The Legal Newswire – Bank of America Corp., the second- biggest U.S. bank by market value, said it will stand trial on administrative charges related to the 2003 bankruptcy of dairy company Parmalat Finanziaria SpA.
Bank of America Corp. faces charges that it didn’t have sufficient internal controls to prevent employees from acting improperly before Parmalat collapsed in Europe’s biggest bankruptcy in December 2003. Milan Judge Cesare Tacconi, who indicted four other banks on June 13, issued the ruling.
“These charges against Bank of America are purely administrative in nature,” the bank said in an e-mailed statement. Possible penalties include the loss of a license to operate in Italy, fines and confiscation of profits from Italian transactions.
Parmalat collapsed after revealing that a 3.95 billion-euro ($5.3 billion) bank account didn’t exist, and the maker of long life milk and Santal juices defaulted on about 14 billion euros in debt and other credits. Bank of America, one of Parmalat’s biggest lenders, said it had no knowledge of fraud at the dairy and lost $450 million when the company failed.
“When the case comes to trial, we believe the evidence will show that the charges against Bank of America are completely unfounded,” the statement said. “Bank of America had in place all appropriate governance policies and procedures.”