Judge says Parmalat fraud suit can proceed
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A New Jersey Superior Court judge ruled Tuesday that a $7 billion lawsuit filed by Italian dairy giant Parmalat SpA against Citigroup could go forward on a claim that Citigroup aided and abetted former Parmalat executives in misappropriating company money. Parmalat has alleged that Citigroup helped obscure the state of Parmalat's finances and helped to move the ill-gotten gains of former Parmalat executives through its bank accounts. Judge Jonathan N. Harris dismissed several of Parmalat's claims, including fraud claims brought under New Jersey's Uniform Fraudulent Transfer Act and racketeering claims brought under the state's Racketeer Influenced and Corrupt Organizations Act. The trial is scheduled for May 5.
Citigroup was among four banking giants indicted by an Italian judge in June 2007 for not revealing to the market that Parmalat was not financially healthy. Parmalat filed for insolvency in December 2003 after discovering accounting discrepancies totaling nearly $5 billion in debt.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.