Judge OKs $20M Stock Deal In Parmalat Fraud Case

Judge OKs $20M Stock Deal In Parmalat Fraud Case - 3/3/2009

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2009 News and Press Releases

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News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

SETTLEMENT NEWS:

Judge OKs $20M Stock Deal In Parmalat Fraud Case
Melissa Lipman

Securities Law 360. March 3, 2009
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EXCERPT: A federal judge has signed off on a second settlement worth about $20 million in stock in a securities fraud class action against bankrupt Italian dairy giant Parmalat SpA and its financial and accounting advisers, on top of a $50 million agreement approved a year and a half ago. Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York also approved roughly $13 million in attorneys' fees and more than $4.1 million in expenses Monday for class co-lead counsel Cohen Milstein Sellers & Toll PLLC and Grant & Eisenhofer PA, along with of counsel Spector Roseman Kodroff & Willis PC. The judge already signed off on a partial $50 million settlement with Banca Nazionale del Lavoro SpA and several Credit Suisse entities in July 2007. Under the terms of that deal, Credit Suisse and BNL will each pay $25 million and make certain changes in their corporate governance, although class members will not see any payout until the case is completely resolved. In addition, the plaintiffs' attorneys were reimbursed for $6 million in expenses. The new settlement, with Parmalat and Dr. Enrico Bondi, who is overseeing the Parmalat bankruptcy in Italy, provides for plaintiffs to have a $200 million recognized claim in the Italian insolvency proceedings. That claim will entitle the class to 10.5 million shares of new Parmalat stock, which closed at €1.47 on Monday, making the deal worth €15.4 million ($19.4 million). In support of the settlement, the plaintiffs, which include both U.S. and foreign buyers of Parmalat securities, noted in September that "in light of this court’s prior rulings on subject matter jurisdiction and class certification, the claims of the foreign investors are unquestionably more tenuous that those of domestic investors," leading the deal to call for payments to foreign investors to be discounted under the allocation plan.

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