Tuesday, August 10, 2004

Does anyone understand this?

Parmalat, currently under a government-appointed administration, said in a statement today that the company was seeking to recover its debt repayments made to Deutsche Bank in December 2003. The German banking company had reportedly raised €350 million for Parmalat through a bond sale in September last year, just three months before the Italian food giant's collapse into bankruptcy. Parmalat's new administration, headed by Enrico Bondi, has argued that the company's transaction with Deutsche Bank in December 2003 was carried out at the expense of other creditors. Parmalat said that Deutsche Bank, its former financial adviser, had reduced its exposure to the company by 17 million, following this transaction.

Apparently I don't understand either banking laws or Europe and banking laws. If a person files bankruptcy, that means they are seeking protection from creditors and maybe even removal of their debt, this also ends up in liquidating their assets , of course it may work differently in Europe.

So when this company files bankruptcy, they sue the bank for money they paid to cover their debts?


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