Business News EMI Sale Timeline Labels & Publishers Legal Top Stories

Terra Firma confirm appeal in Citigroup litigation

By | Published on Wednesday 12 January 2011

Terra Firma vs Citigroup

Terra Firma has formally filed its appeal with the New York courts regarding last years disastrous litigation against Citigroup in which the equity twonks claimed the US bank had tricked them into buying EMI back in 2007 by providing misleading information regards other bidders.

Terra Firma big cheese Guy Hands, the one time private equity genius who came across as a bit of bumbling, bitter fool at the trial, alleged Citigroup’s man David ‘The Worm’ Wormsley misled him during three phone calls the weekend before his equity company made its bid for the music major. That misinformation, Hands said, caused him to bid too soon and too high for EMI, a deal which has cost the equity firm millions and seriously tarnished its once enviable (within City circles) reputation.

But The Worm denied ever making the calls, and Hands couldn’t provide any real proof they took place, while his recollection of everything else that happened that key weekend – other than that biscuits were eaten – was rather sketchy. So, while the bankers didn’t come out of the court hearing completely untarnished either, the New York jury were nevertheless unconvinced by Hands’ claims and found in Citigroup’s favour.

Terra Firma’s appeal filing challenges certain technical aspects about the way last year’s trial was conducted, presumably hoping appeal judges might overturn the ruling based on legal procedure.

In a statement, Terra Firma said: “Boies, Schiller and Flexner, on behalf of Terra Firma, [have] filed a notice of appeal in the litigation against Citigroup. The appeal will challenge legal rulings made by the court in the litigation”. Meanwhile Citigroup responded thus: “Citigroup’s conduct in the EMI transaction was entirely proper. We are confident the appeals court will confirm that Terra Firma received a fair trial”.

If the US appeals court agrees to hear Terra Firma’s case, it is thought the equity group’s legal dispute with Citigroup would run at least another year, and perhaps considerably longer. It seems almost certain now that by the time there is a resolution on this Terra Firma will have bailed on EMI, allowing Citigroup to instigate a sale of the flagging music company.