A New York appeals court has ordered a retrial in Guy Hands’ case against Citigroup, in relation to the bank’s conduct during his equity company Terra Firma’s takeover of the major music company EMI in 2007.
As previously reported, in 2010 Terra Firma failed to convince a New York jury that the only reason it bought faltering music company EMI for £4 billion at the moment that it did was because one of the US bank’s top advisors gave the equity firm false information about the intentions of another bidder. The deal resulted in Terra Firma being laden with heavy debts to the bank, which proved a bad situation to be in when the credit crunch occurred, not long after the transaction was completed.
In the first court battle Terra Firma failed to come up with any killer witnesses, and in the end (despite Citigroup’s reputation taking a bit of a bashing in the courtroom too) it took the jury just four and a half hours to rule in the bank’s favour. Three months later Citigroup repossessed EMI, leading to the company being split in two and sold off to Universal and Sony/ATV. And the rest, of course, is history.
And now, it seems, a lot of that history is going to be raked up again in a retrial. Following a request from Terra Firma’s lawyers last September, the Second US Circuit Court of Appeals today said that District Judge Jed Rakoff had incorrectly instructed the jury first time round on the relevant English law in the case – the sale having taken place in England, despite the original trial eventually being heard in the States – and therefore ruled that the whole case should be heard again.
While you await a date for the new trial, you can relive the original one in the CMU archive here.
