In re Parmalat Secur. Litig., 659 F. Supp.2d 504 (S.D.N.Y. 2009). Parmalat Cap. Fin. Ltd. v. Bank of America Corp., 412 Fed. Appx. 325 (2d Cir. 2011). This Court denied abstention only as to the Bondi action.

In re Parmalat Secur. Litig., 659 F. Supp.2d 504 (S.D.N.Y. 2009).Parmalat Cap. Fin. Ltd. v. Bank of America Corp., 412 Fed. Appx. 325 (2d Cir. 2011). This Court denied abstention only as to the Bondi action.

With regard to the North Carolina action, we affirmed the District Court's grant of summary judgment to Bank of America. See Parmalat Capital Fin. Ltd. v. Bank of Am. Corp., 412 Fed.Appx. 325 (2d Cir.2011) (summary order). In a separate Opinion regarding the Illinois actions against Grant Thornton, we vacated the decisions not to abstain from deciding these cases pursuant to the mandatory abstention provision in 28 U.S.C. § 1334(c)(2).

The doctrine of “[i]n pari delicto prevents a party from suing others for a wrong in which the party itself participated.” Parmalat Capital Fin. Ltd. v. Bank of Am. Corp. , 412 Fed.Appx. 325, 327 (2d Cir.2011). For the doctrine to apply, the plaintiff must be just as culpable, or more culpable than the defendant in the conduct forming the basis for the complaint.

Notably, although not raised by the parties, the Second Circuit in Parmalat IV refers to another related case regarding the issue of the S.D.N.Y.'s denial of abstention and remand to a North Carolina state court. See Parmalat Capital Finance Ltd. v. Bank of America Corp., 412 Fed. App'x 325, 327-28 (2d Cir. 2011). There, the Second Circuit affirmed the S.D.N.Y.'s denial of abstention and, in applying part two of the four-part test, specifically considered the in pari delicto defense, finding that it was settled law in the state of North Carolina, and available against the Trustee in a related Parmalat action, based on North Carolina law.

Litigation is "related to" "a pending bankruptcy proceeding [if] its outcome might have any `conceivable effect' on the bankrupt estate." In re Cuyahoga Equip. Corp., 980 F.2d 110, 114 (2d Cir. 1992); see Parmalat Capital Fin. Ltd. v. Bank of Am. Corp., 632 F.3d 71, 78 (2d Cir. 2011). Under 28 U.S.C. § 1334(c)(2), mandatory abstention occurs if "the action has already been commenced in state court, and it can be timely adjudicated there."In re Ames Dep't Stores, Inc., 319 F. App'x 40, 42 (2d Cir. 2009).

Moreover, there is no evidence that Credit Suisse engaged in any looting or directed the Founders to do so. Simply put, the fraud originated with the Founders. See In re Parmalat Securities Litig., 659 F.Supp.2d 504, 530–31 (S.D.N.Y.2009) (applying in pari delicto even though defendant auditors and bank allegedly worked with corporate insiders to facilitate and conceal the wrongdoing), aff'd in part, vacated in part on other grounds, 412 Fed.Appx. 325 (2d Cir.2011). Having established that the Founders are primarily responsible, the court is excused under the in pari delicto doctrine from further parsing out fault.

While the Court of Appeals for the Second Circuit vacated a significant portion of the District Court's order in In re Parmalat Securities Litigation , the Court of Appeals affirmed the District Court's findings on the adverse interest rule and the application of in pari delicto under North Carolina law. See Parmalat Cap. Fin. Ltd. v. Bank of America Grp. , 412 F. App'x 325 (2d Cir. 2011). Therefore, even if an agent's actions may be detrimental to the corporation in the long-term, most courts find there is no total abandonment and imputation applies as long as the agent's actions provided even a short-term benefit to the corporation.