Dismissal for Grant Thornton in Parmalat Suit

Winston & Strawn Wins Dismissal for Grant Thornton in Parmalat Suit

Ross Todd
The American Lawyer
September 22, 2009

Sometimes it pays to settle, and sometimes it pays to fight. It looks like Grant Thornton and its lawyers at Winston & Strawn made a wise decision to fight claims brought by Parmalat and its chief executive, Enrico Bondi, over the fraud that caused the company's collapse in 2003.

On Friday Manhattan federal district court judge Lewis Kaplan ruled on summary judgment motions that Bondi could not recover damages against Parmalat auditors Grant Thornton LLP or Grant Thornton International because Parmalat's own officers were responsible for the fraud. Here's the 45-page opinion from Kaplan.

This result looks even better when viewed in light of the $150 million that Deloitte agreed to pay to settle similar claims, and the $100 million that Bank of America agreed to pay this summer.

Grant Thornton's lawyer, Bruce Braun at Winston & Strawn, praised the decision. "It's a very methodical opinion from a judge who approached these issues very carefully," Braun told the Litigation Daily. The summary judgment motions were argued for the auditors by Winston appellate partner Linda Coberly.

Peter Calamari, Parmalat's lawyer at Quinn Emmanuel Urquhart Oliver & Hedges, called the decision "disappointing." Actually, disappointing is a good word to describe Parmalat's efforts to date to hold others responsible for its collapse. The $250 million it has collected from Deloitte and Bank of America are a small fraction of the billions it sought. In its biggest setback, last year Quinn Emanuel lost a trial against Paul, Weiss, Rifkind, Wharton & Garrison client Citigroup in New Jersey state court when a jury turned the tables on Parmalat and found it liable for $364 million in counterclaim damages. Parmalat had sought $2.2 billion from Citigroup.

Kaplan's decision also freed Bank of America from claims brought by a separate Parmalat entity, Parmalat Capital Finance Limited, that was represented by Diamond McCarthy. This case was not covered by BofA's earlier global settlement. The bank was defended by Sidley Austin.

Braun pointed out to us that his partner Coberly faced off against Quinn Emanuel's Kathleen Sullivan for the oral arguments. On the same day that Coberly found out about the win, she and Sullivan argued competing sides in an unrelated case involving the claims of Refco's trustee (represented by Sullivan) against Grant Thornton before the 2nd Circuit. (Does the Lit Daily smell a Yankees/Red Sox-style rivalry? Let's hope so. It's almost October.)

This article first appeared on The Am Law Litigation Daily blog on AmericanLawyer.com.