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http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1078381672098&referrer_id=yahoo&ft_ref=yahoo1&segid=03052
They left out one big reason, DUMB JURIES!!!!!!
Parmalat plaintiffs put hopes in US justice
By Emily Backus and Fred Kapner
Published: March 10 2004 17:51 | Last Updated: March 10 2004 17:51
While most of Parmalat's creditors hope a restructuring plan will
allow them to recover part of their investments, a growing number of
Italian and other investors are joining class action lawsuits in the
US aimed at Parmalat, its main lending banks and auditors.
Three class action suits filed in recent weeks are likely to be
consolidated. One, from Milberg Weiss Bershad Hynes & Lerach, the law
firm that has chased Enron, Tyco and Martha Stewart, has gathered
around 2,000 Italian investors in Parmalat.
The Milberg Weiss suit, filed in January on behalf of Southern Alaska
Carpenters Pension Fund, was amended last week in a New York federal
court in part to allow non-US investors to join.
The suit targets Parmalat-related companies including Citigroup, Bank
of America, Deutsche Bank, Morgan Stanley, and Parmalat auditors
Deloitte and Grant Thornton International.
The banks and auditors are all under preliminary investigation by
Italian and US authorities for their role in Parmalat's collapse.
The Milberg Weiss complaint alleges that international financial
institutions colluded with Parmalat executives in a scheme to hide the
dairy group's massive debts in order to inflate the value of its
securities. They all deny the charge.
Non-US investors and creditors have already used US courts to seek
damages from companies in their own countries. But the large Italian
contingent involved in one of Europe's worst bankruptcies could open
the floodgates to US-based class action suits addressing transactions
worldwide, lawyers in the US and Italy hope.
Italian investors have turned to the US justice system because Italy's
is too slow and does not permit class actions or punitive damages,
says Pietro Adami, a Verona-based lawyer who organised Italian
investor involvement in the Parmalat suit in the US.
In addition, Italy does not permit contingency fees, forcing
plaintiffs to risk large sums paid to lawyers as a case proceeds. "I
have a case that I began on behalf of 146 individuals in 1993," says
Mr Adami. "After 10 years and nine judges, they finally reached a
first verdict. Now [the defendant] has begun an appeal."
US legal experts say that it is not unusual for foreigners to seek
damages through American courts, even for transactions that took place
entirely on foreign soil.
"Any class action of a significant size will have people outside of
the United States," says Geoffrey Miller, a professor at the NYU Law
School. "I've always wondered why there aren't more of them."
A Supreme Court decision in the 1970s determined that non-nationals
could participate in class action suits as long as they fit within the
definition of the class, according to Mr Miller.
Nevertheless, Curtis Trinko, a lawyer whose clients joined the Milberg
Weiss class action, believes jurisdiction will be a major battle
ground in the Parmalat case. "You have to demonstrate that a
substantial part of the transaction took place in the [geographical]
area you are litigating," Mr Trinko says. "To say that these issues
are complex is an understatement. The financial institutions are going
to fight like crazy, especially with the international implications of
this."
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