Petrobras write-down may boost US class action lawsuit

Wilmington, Delaware

BRAZILIAN oil company Petrobras' US$17 billion write-down, announced last week, may have been meant to close the accounting on a sprawling corruption scandal, but could instead provide fresh ammunition for a US class action lawsuit.

The case, filed in Manhattan federal court in December by a group of large investors, alleges US$98 billion of the company's American depository shares, or ADRs, and bonds were artificially inflated since 2010 by the company overstating the value of assets such as major projects. Petrobras has moved to have the case dismissed.