30.03.2006 22:57:00

Bank of America To File Claims for More Than $1 Billion Against Parmalat

NEW YORK, March 30 /PRNewswire-FirstCall/ -- Yesterday, Federal District Court Judge Lewis A. Kaplan in the Southern District of New York issued a ruling that allows Bank of America to go forward in asserting its counterclaims for damages in excess of $1 billion against Parmalat SpA, the bankrupt Italian dairy company. The 123-page counterclaims in the lawsuit brought by Enrico Bondi, the Extraordinary Administrator of Parmalat in October 2004, charge that Parmalat and its management committed fraud, misrepresentation, conspiracy and other illegal acts, and Bank of America seeks damages as compensation for financial losses and other damage it suffered as a result.

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At a hearing in New York on Wednesday, March 29, Judge Kaplan ruled that Bank of America may pursue these claims against Bondi and Parmalat, and he rejected arguments by Bondi that Bank of America should not be allowed to pursue its claims. Following the hearing, the judge issued an order to that effect.

In a statement, Bank of America said:

"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. Bank of America was led to believe that Parmalat was a strong, honest and profitable company, and Bank of America's actions in providing loans and other financing were consistent with this belief. Our company was seriously injured by this fraud."

At the time of Parmalat's bankruptcy in December 2003, Bank of America had $647 million of exposure to Parmalat, $462 million of which was unsecured. Under the Federal RICO law, Bank of America can seek damages up to three times the amount of its losses.

In its counterclaims, Bank of America says that Dr. Bondi's lawsuit is nothing more than an effort to "shift the blame for Parmalat's demise from the true culprit - Parmalat itself - to victims of the fraud, such as Bank of America."

The Bank's counterclaims set out the facts about Parmalat's decade-long, massive fraud, which have come to light through the admissions of Dr. Bondi and the testimony of Parmalat insiders themselves. Beginning in the early 1990s, Parmalat, led by its senior officers, including CEO Calisto Tanzi and CFO Fausto Tonna, formed dummy companies to hide Parmalat's true financial condition and cover up losses suffered by Parmalat's subsidiaries. Parmalat managers engaged in fraudulent schemes, such as creating fake documents and devising phony transactions that gave rise to phony income. The various schemes resulted in overstated levels of cash and earnings and understated levels of debt. Recent testimony in Milan by former Parmalat officials has confirmed these facts.

Parmalat's real financial condition and its fraudulent activities were not reflected in its audited financial statements or in the representations made by Parmalat and its senior officers. Bank of America reasonably relied upon these representations in lending the company hundreds of millions of dollars and raising capital for Parmalat from institutional investors in the U.S.

Bank of America's counterclaims include the following specific claims:

1) Securities Fraud for false and misleading statements by Parmalat in connection with Parmalat securities offerings;

2) Racketeer Influenced and Corrupt Organizations (RICO) Act violations under 18 U.S.C. § 1962(c) for engaging in racketeering through a criminal enterprise (e.g., providing false information about Parmalat's financial conditions in violation of mail fraud and wire fraud statutes) in violation of the RICO Act. Damages awarded for RICO violations by Parmalat may be trebled.

3) Fraud for knowingly, and with the intent to defraud, making false and misleading statements to Bank of America about Parmalat's financial condition.

4) Negligent Misrepresentation for making negligent statements to Bank of America about Parmalat's financial condition.

5) Civil Conspiracy: for participating in a conspiracy by Parmalat senior managers and others in an effort to hide Parmalat's true financial condition.

6) Violations of the North Carolina Unfair and Deceptive Trade Practices Act (N.C. Gen. Stat. §§ 75-1.1 et seq.): for engaging in unfair and deceptive conduct that had a substantial effect on Bank of America's North Carolina business operations.

Bank of America noted that the fraudulent activity detailed in its counterclaims has already been admitted in legal filings by Dr. Bondi and in sworn testimony by Parmalat insiders, which will assist Bank of America in proving that it was damaged. As a victim of Parmalat's fraud who reasonably relied on the truthfulness of Parmalat's financial statements and representations, Bank of America looks forward to putting these facts before a jury at trial and obtaining justice for itself and its shareholders.

About Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 38 million consumer and small business relationships with more than 5,800 retail banking offices, more than 16,700 ATMs and award-winning online banking with more than 14 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in 150 countries and has relationships with 97 percent of the U.S. Fortune 500 companies and 79 percent of the Global Fortune 500. Bank of America Corporation stock is listed on the New York Stock Exchange.

http://www.bankofamerica.com/

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