The liquidator to the Irish Parmalat subsidiary, Eurofood, Mr Pearse Farrell, is preparing for a number of court battles with the special administrator of the Parmalat group, Dr Enrico Bondi.
The outcome of the battles, which concern who should have access to the bulk of the IFSC-based company's assets, is expected to be eventually decided in the European Court of Justice in Luxembourg.
Bank of America, which sought the appointment of Mr Farrell, has said it is owed approximately €3.9 million by Eurofood. If Mr Farrell fails in his battles with Dr Bondi then the Italian will get access to the bulk of Eurofood's assets, which are in Venezuela.
The appointment of Mr Farrell as liquidator to Eurofood by the High Court is being appealed by Dr Bondi to the Supreme Court. The hearing is due to take place on May 27th.
Meanwhile, in Italy Bank of America and Mr Farrell are contesting the appointment of Dr Bondi by the Italian courts as special administrator to Eurofood. The hearing is scheduled to take place in Bologna on May 31st.
Dairy group Parmalat was one of the largest companies in Italy until the end of last year. It collapsed when it emerged that its senior executives were involved in a complicated assets fraud.
At the centre of the dispute between Mr Farrell and Dr Bondi is the interpretation as to where Eurofood's "centre of main interests" lay. In the High Court, Mr Justice Kelly said Eurofood's centre of main interests was within this State. He said the IFSC-based company was subject to supervision by the Department of Finance, the Revenue and the Central Bank of Ireland, and its tax benefits were conditional on it being managed and operated here.
The courts in Parma, Italy, admitted Eurofood into insolvency and found that its centre of main interests was in Italy, not Ireland, and that Dr Bondi, therefore, should handle the liquidation. The appeal to take place in Italy will be aimed at having the Italian courts recognise Mr Justice Kelly's decision.
If Dr Bondi wins the overall issue then Mr Farrell will be a "liquidator in secondary proceedings" and thereby restricted under EU law in relation to Eurofood assets held outside this jurisdiction. The bulk of the company's assets are in Venezuela, by way of a dairy conglomerate that is trading successfully.
Eurofood was involved in raising funds for Parmalat's operations in Venezuela.
Bank of America is concerned that assets which could be claimed by Mr Farrell would be diluted in Italy if the liquidation was handled by Dr Bondi.
Mr Farrell is being advised by solicitors Matheson Ormsby Prentice. Eurofood's long term legal advisers had been McCann Fitzgerald. Mr Ambrose Loughlin of McCann Fitzgerald served as a non-executive director of Eurofood. Ms Catherine Meenaghan, an employee of Bank of America, was a second Irish non-executive director.
