EU expert backs US bank in Parmalat case

A legal expert at the EU's top court has backed Bank of America in a dispute between the bank and Parmalat's administrators over…

A legal expert at the EU's top court has backed Bank of America in a dispute between the bank and Parmalat's administrators over who should wind up a unit of the collapsed Italian group.

An advocate general at the European Court of Justice (ECJ) today recommended that the liquidation of an Irish unit of Parmalat, Eurofood, should be carried out under Irish law.

Although opinions by advocate generals are not binding, the court follows them in most cases.

Parmalat's administrators have said they want to get hold of Eurofood documents as they pursue a $10 billion damages case against Bank of America, alleging the US bank was responsible for Parmalat's collapse in an accounting scandal in 2003.

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Bank of America has denied wrongdoing, and it has backed an earlier decision by the Irish High Court that Eurofood should be wound up under Irish insolvency law.

However, a court in Italy had separately named Parmalat's administrator to oversee the liquidation of Eurofood, leading to the case being referred to the ECJ.