Bank of America to sue Parmalat

Bank of America has been granted permission by a US judge to sue the Italian company Parmalat for $1 billion.

The bank claims that the firm's former managers lied about its finances before filing for insolvency in 2003.

Parmalat has since emerged from bankruptcy protection, and has itself filed a $10 billion suit against Bank of America for its suspected role in the company's collapse.

But Bank of America insists that taking legal action was just a way for Parmalat to shift the blame for its problems away from itself and onto the victims of its fraud.

"Parmalat and its management repeatedly lied to Bank of America, other banks, auditors, rating agencies, investors and the market in general about its financial condition," the bank said in a statement.

Calisto Tanzmi, the founder of Parmalat, along with 15 other former employees and bankers, are currently on trial, charged with fraud and false accounting.

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