• Broad Application of in pari delicto Defense Results in Summary Judgements for Grant Thornton in Parmalat Case
  • November 10, 2009 | Authors: Robert W. Coleman; Peter J. Larkin; Thomas R. Manisero
  • Law Firms: Wilson Elser Moskowitz Edelman & Dicker LLP - Dallas Office; Wilson Elser Moskowitz Edelman & Dicker LLP - White Plains Office; Wilson Elser Moskowitz Edelman & Dicker LLP - New York Office
  • An old defense to claims brought by clients and former clients has been renewed and given broad application to end litigation against affiliates of the former client's auditors. U.S. District Judge for the Southern District of New York Lewis Kaplan ruled, on September 18, 2009, that all claims brought by the plaintiffs, Dr. Enrico Bondi, ("Bondi"), the Extraordinary Commissioner of Parmalat Finanziaria, S.p.A., Parmalat S.p.A., and their affiliates (jointly "Parmalat") in Italian reorganization proceedings, and Parmalat Capital Finance Limited, a subsidiary of Parmalat ("PCFL"), against defendants Grant Thornton International ("GTI") and Grant Thornton LLP ("GT-US") were barred under the in pari delicto defense. As a result, Judge Kaplan granted summary judgments to both GTI and GT-US and dismissed all claims with prejudice. The importance of the Parmalat decision is that it represents a clear articulation of a simple rule ¿ an accountan'ts client cannot benefit from its own fraud through a lawsuit against its accountant.