Italian Court Upholds Parmalat “Clawback” Law

Law360, New York (April 5, 2006, 12:00 AM EDT) -- Aiding Parmalat SpA’s recovery from a massive accounting fraud scandal, Italy's highest court has upheld a controversial law allowing the food and dairy conglomerate to pursue up to €7.5 billion in claims against former bank creditors.

On Tuesday, the Italian Constitutional Court sustained the law permitting Parmalat’s so-called “clawback” claims, dismissing lenders’ earlier protests as “groundless.”

In late 2003, the government approved an expansion of the country’s bankruptcy law to protect Parmalat from creditors as it sought to restructure.

Parmalat founder Calisto Tanzi and 15 other...
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