Parmalat’s partial settlement
Wednesday, March 28th, 2007Two defendants in the case In re Parmalat Securities Litigation, namely Banca Nazionale del Lavoro SpA (BNL, now part of the BNP Paribas Group (Euronext: BNP; OTC: BNPQY)) and Credit Suisse Group (SWX: CSGN; NYSE: CS) and other Credit Suisse entities, have agreed to settle the case against them. This settlement, for $50 million in cash and non-financial consideration relating to corporate governance, is a partial settlement, as the action against Parmalat SpA (the successor to Parmalat Finanziaria SpA (Borsa Italiana: PLT)) and other financial institutions among others proceeds. (Also see The 10b-5 Daily on scheme liability.)
See the partial settlement website, in seven European languages, for the detailed notice, the settlement stipulation of 15 February 2007 and more. The Court will consider whether to approve the settlement at a hearing in New York on 19 July 2007; the deadline to object or opt out is 19 June 2007.
It is worth pointing out two things here, concerning the class and the defendants and lead plaintiffs in particular. The class to which this settlement applies includes “all people and entities who bought Parmalat common stock and/or bonds from January 5, 1999 through and including December 18, 2003, and were damaged thereby, regardless of where such people live or where they purchased their Parmalat securities.” (WV&Z’s emphasis)
Both defendants are non-US entities and all five co-lead plaintiffs hail from outside the US, including Hermes Focus Asset Management Europe Limited of the UK, Cattolica Partecipazioni SpA of Italy and Société Moderne des Terrassements Parisiens of France. Lead Counsel for the plaintiffs are Cohen Milstein Hausfeld & Toll PLLC, Grant & Eisenhofer PA and, acting as Of Counsel, Spector Roseman & Kodroff PC; Counsel for the defendants are Davis Polk Wardwell (BNL) and Allen & Overy LLP (Credit Suisse).
A note to Association of British Insurer’s Peter Montagnon regarding the plaintiffs’ counsel’s fees and expenses (see here): the fee counsel will seek at the hearing is not to exceed 12% of the settlement fund and so, at least in this case, it is not close to the ‘almost a third of the proceeds’ as claimed is the norm.
In latest news regarding Parmalat’s legal proceedings, the Wall Street Journal (subscription required) reports that some counterclaims brought by Bank of America Corp. (NYSE: BAC) against the company have been dismissed and that the securities fraud claims against its Dutch subsidiary also have been dismissed. A Bank of America spokesperson however said that it is “looking forward to prosecuting [the remaining counterclaims including for securities fraud against Parmalat SpA] vigorously.”