Italian prosecutors questioned Parmalat founder and former chief executive Calisto Tanzi at a prison in Milan Sunday as part of the investigation into suspected massive fraud at the country's eighth-largest industrial group. Parmalat was declared insolvent the day before by a court in Parma, where the company is based, as estimates of funds missing from some 15 years of false accounting ranged as high as $12 billion, published reports said. Parmalat's auditor, the Italian arm of accounting firm Grant Thornton International, released a statement Friday denying any role in disguising the firm's finances and proclaiming itself the victim of "grave fraud."
Bankrupt toy retailer FAO Inc. agreed to sell its flagship FAO Schwarz store in Manhattan, the company said Friday. The $20 million deal with VGACS Acquisition Inc., a subsidiary of private-equity group D.E. Shaw Laminar Portfolios LLC, also includes another store in Las Vegas, the FAO Schwarz line of clock towers, and Internet and catalog businesses. FAO, based in King of Prussia, Pa., filed for Chapter 11 protection from creditors Dec. 4, less than eight months after recovering from a previous bankruptcy. The company also announced the sale of its 34 Right Start stores to Hancock Park Associates of Los Angeles for an undisclosed amount.