Terra Firma boss Hands drops $2 billion EMI case against Citi

Fri Jun 10, 2016 1:42pm EDT
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By Freya Berry

LONDON (Reuters) - Briton Guy Hands has withdrawn his case against Citigroup (C.N: Quote) over the 2007 buyout of music label EMI, his private equity firm Terra Firma said on Friday, ending almost seven years of on-off litigation over the disastrous deal.

Hands, the outspoken founder of Terra Firma and a well-known figure in the private equity world, had been seeking damages of 1.5 billion pounds ($2.2 billion), alleging that the U.S. bank misled him over the EMI deal.

"Terra Firma confirms it unreservedly withdraws its allegations of fraud," a lawyer for the firm told a London court, adding that it would also pay Citi's legal costs.

At the time of the acquisition, Citigroup advised the then publicly listed EMI as well as providing financing to Terra Firma.

Terra Firma's case had focused on a series of alleged "oral misrepresentations" by senior Citi bankers David Wormsley, Chad Leat and Michael Klein, which it claimed led to the firm overpaying for EMI. All three men were set to be called as witnesses at the trial.

"These claims were brought in good faith," Terra Firma said in an emailed statement.

"However, it has become evident that our documentation of the fast-moving and complex events, and memories of these events after nine years, are no longer sufficient to meet the high demands of proof required for a fraud claim in court."

Citi welcomed the end of the case.   Continued...

Guy Hands (R) of Terra Firma Capital Partners exits Manhattan Federal Court with his wife Julia in New York October 26, 2010. REUTERS/Brendan McDermid