How it all went sour

F e na ri s a l so l aid th e g rou n dwork for a co

Info icon This preview shows pages 2–3. Sign up to view the full content.

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: F e n·a ri s a l so l aid th e g rou n dwork for a co mp l ex f ina n cin g s c h e m e th rou g h a De l aw a r e co mp a n y c a l l e d B uc o n e r o, th e It a l ia n fo r '' bl ac k h o l e; ' w hi c h C iti g r oup set up f o r P a rm alat i n 19 99 . Buc o n e r o l oa n e d a to t a l of $ 1 37 mil l i o n to a S \v i ss s ub s id i a r y o f Par m alat t ha t th en d i s tr ibu t e d th e mo n e y to ot h e r Parma l at co m p ani es . Bu c one r o r e- ce ived a g u a r a nt ee d re t u rn of a lm os t 6%, p lu s a t ot a l of abou t $ 7 m il l ion i n f ee s for C it- i g r o up. I n hi s laws ui t a g a i n s t C i ti g r o up, w h ich se e k s a wh opp in g $ 1 0 bi l li o n i n dam- ag e s , ban k r u p t cy ad min i s t r a t o r B o n c U a l- leg e s t h at Bu co n e r o w a s u se d t o dr ess up de bt as an eq u i t y i n fu si o n , a n d s ay s t i , e bank m u s t h a ve I mown abo u t Pa r mala t 's t r u e f i- n a n c ial s itu a t i o n. C i tig r o u p de ni es i t , s ay i ng P a rma l at wa s m a k i n g u s e of a p e de c Uy legal t ype of l o w- cost fi n a n cin g s cheme em p loye d b y m a n y o t her Ital i a n co mp a n i e s . Wh a t ' s c l ea r i s t h a t by t he tim e it c o ll a p s e d , P a rm a l a t h a d es t a bli s hed d o ze n s o f a r ra n ge m e n t s inv o l v i ng of fs h o r e c omp a- ni es-a n d b a nk s ea rned hug e co mm i s s i o n s for h e l pin g it do so . A n o f f i cia l a cc oun ti n g by B o nd i s h o w s U, a t €6 . 5 bi ll i on- a lm o s t h a l f o f P a rm a l a t 's to t a l d e bt- wen t to p ay i n t e r es t , c o mmi ss i o n s a n d d i v i d e n d s. O f t h a t , € 2.8 bi l l i o n w e nt to t h e b a nk s alon e . B y 1 995, To rm a a nd oth e r s h a v e to l d ma g i s tr a t es, t h e c o m p a n y was lo s i n g mor e t h a n ·$3 00 mi l li o n a nnua ll y in La tin Am e r i- c a a l o n e . Pa r ma l a t decided t o mov e s o m e o f i t s d eb t o ff U ,e co m pany ' s c o n so l i d a t e d fi- n a n c i a l s t a te m e n t s . It d i d so t h ro u g h thr e e s h e l l c omp a ni es bas e d i n t h e Ca rib b ea n. Th ese fir ms pr e t end ed to se ll Pa rm a l a t pr od u c ts , a nd Parma l a t w o u l d s e nd th e m o ff i c es of acc o u nt a nt s D e l o itt e & T o u c h e, f i l ed a n i nt e r n a l ' lear l y war n in g re po rt " ex- p r es si n g ser io u s c on c e rn s a b out P an n a l a t ' s Latin A m eric a n o p e r a ti o n s . H e pe p pe r ed t he c o m pan y w i t h s o m a n y q u est io ns th a t C F O T o n na l o s t hi s t e mp e r . Th e r e q u e st s f o r in for m a t i o n a r e " o f fe n s iv e a n d r i dic u lous:' T o n n a thund ere d i n a Ju n e 9, 2 , fa x t o A dol f o lv I am o li , t h e D e l o i tt e p a r t n er in M i- lan, a n d t e r m inat e d D e l o itt e ' s Pan m a l a t b u s i- ness i n Ar gen t i n a. D e l o i t t e- w hi c h h a d t ak- e n over a s Pa n m a l a t ' s w or l dw i de a u...
View Full Document

  • Two '12
  • Suzan
  • Calisto Tanzi, Parmalat

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern