In December 2003, Parmalat SpA collapsed into unexpected bankruptcy. Its off-balance sheet debts were later revealed to total 14.3 billion euros, and it was discovered that it had allegedly been falsifying its accounts and profits for a period of over 10 years. Details the history of the company and Calisto Tanzi, the entrepreneur who founded it. Also describes the development to date of Parmalat's "Extraordinary Administration," the restructuring of the company under the Italian equivalent of Chapter 11 insolvency. Looks at how Parmalat disguised its financial problems for so long. Also explores: (1) when and why Parmalat's financial problems started; (2) how much Parmalat's strategy contributed to its problems; (3) the impact of changing external environments (political and economic) on Parmalat's problems; (4) the effect of Parmalat's history and origins as a family company on the way it managed its problems; (5) how such large accounting mis-statements could be perpetrated; (6) how those mis-statements could go undetected by investors, bankers, and regulators; and (7) what red flags and warning signals could have alerted outsiders to Parmalat's problems.

The case sets out a dilemma faced within International Paper (IP) in deciding how best to manage a particular set of environmental responsibilities and liabilities - remediation to repair past instances of environmental pollution. Remediation issues are resolved over long time-frames because of their technical and regulatory complexity. In addition, the regulatory environment has been continuing to evolve. The underlying case issue is how best to manage corporate social responsibilities where both the number of liabilities and the future costs are uncertain. In this case, the number of remediation issues faced, the costs of remediation and the impact of future regulatory inflation are all unpredictable. Consequently through this case students see the wider external and internal context within which companies must manage their corporate social and environmental responsibilities and the underlying reasons for conflicts of interests between the different stakeholders.