UK Financier Guy Hands: Citigroup Should Face New Trial Over EMI Deal

Tuesday, 24 Dec 2013 12:41 PM


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Exactly four years after suing Citigroup Inc. for allegedly defrauding him into buying music company EMI Group Ltd., British financier Guy Hands said the bank has no grounds now to deprive him of his day in a U.S. court.

Hands' private equity firm, Terra Firma Capital Partners, said in a filing in U.S. District Court in Manhattan on Monday night that its decision to pursue fraud claims in the United States and England, which Citigroup called "legal tourism," did not justify dismissal of the U.S. case.

EMI's catalog has included artists like the Beatles, David Bowie, Coldplay, David Guetta, Norah Jones, Kylie Minogue, Katy Perry, Pink Floyd, Snoop Dogg and Tina Turner.

Terra Firma said the U.K. claims concern different events and parties than the U.S. case and were pursued because of a looming filing deadline over its 4 billion pound (now US$6.5 billion) purchase of EMI in 2007.

It said that with millions of dollars already spent, thousands of hours of legal bills incurred, depositions done, exhibits exchanged and hotels reserved, the third-largest U.S. bank should head back to U.S. District Judge Jed Rakoff's courtroom as scheduled for a July 7, 2014 trial.

"The relief sought by Citi is a punitive sanction that would deprive Terra Firma of its day in court. Such a result would be unjust and unnecessary," wrote Terra Firma's lawyer David Boies, a partner at Boies, Schiller & Flexner.

"Citi, one of the wealthiest and most powerful institutions on the planet, will surely protect itself... when it puts forth its defenses in the English courts," he added.

A new trial was scheduled after the 2nd U.S. Circuit Court of Appeals in Manhattan voided a November 2010 verdict against Terra Firma, which sought $2 billion in damages, saying Rakoff instructed jurors improperly on the governing English law.

Hands claims that a Citigroup banker induced him to overpay for EMI at the height of the buyout bubble by falsely telling him that a high bid was needed to top a rival bidder.

After Terra Firma defaulted on some loans, Citigroup seized EMI and sold it in pieces. The bank has denied wrongdoing and argued that Hands sued because of buyer's remorse.

Citigroup on Tuesday called Terra Firma's actions "a desperate attempt to get a different result. Its new claims are as meritless as its original case, which a jury swiftly rejected. Citi expects to prevail on the merits in any dispute with Terra Firma concerning EMI, regardless of jurisdiction."

© 2014 Thomson/Reuters. All rights reserved.

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