Citi hits back as Hands tries to block trial move

Terra Firma founder argues that his case against bank should be held in New York not London

The epic legal battle over beleaguered music company EMI is set to intensify this week as US investment bank Citigroup counters the arguments of private equity tycoon Guy Hands.

Mr Hands, who bought EMI for £4.2bn in 2007 through his Terra Firma vehicle, is suing Citi for damages over the deal. He alleges that Citi, which lent Terra Firma £2.5bn to complete the deal, misled him into thinking there were other bidders, so he ended up paying too high a price to trump competition.

Citi denies the allegations and is trying to get Mr Hands's case tried in London, where the bulk of the transaction took place. Terra Firma wants the case to be held in New York because that is where Citi is based.

Mr Hands also opposes the move as he would be a key witness and have to testify, but does not enter the UK as he legally avoids high rates of tax by living in Guernsey.

Terra Firma presented its case last week for holding the battle in New York. If successful, a full trial will take place in the US this October.

Terra Firma presented declarations from several potential witnesses. Mr Hands said: "Appearing at trial in the United Kingdom and spending continuous time there managing this litigation, therefore, is a risk I strongly prefer not to take, and it does not exist if the case is tried in New York."

Inga Van Eysden, the chief of the pensions division of the New York City Law Department, argued that four of the partners in Terra Firma are based in the Big Apple and therefore needed to be close to the court.

"Because of the significant economic stake of the New York City Pension Funds in the outcome of this litigation, it is my preference, in my official capacity, that the claims in this action should be litigated in the federal New York forum in which the action is currently pending," said Ms Van Eysden.

Citi has until Thursday to make its arguments for transferring the case to Britain and a judge will make a final decision on jurisdiction at 4pm, on 19 February. Citi is formulating its response this weekend, but will certainly stick to its original argument even in light of Terra Firma's arguments.

EMI, which owns hits by big name artists such as the The Beatles and David Bowie, lost £1.8bn last year and has a £200m pension fund deficit.

Separate to the court action, Mr Hands is trying to raise £120m to stop Citi taking control of the business in what would, in effect, be a debt-for-equity swap. Maltby Capital, the Terra Firma vehicle that formally owns EMI, is likely to fail tests on its loan conditions, according to auditor KPMG.

Mr Hands said in 2008 that cost savings would result in EMI "creating wonderful music in a way that is profitable and sustainable".

Mr Hands is a close friend of William Hague, the shadow foreign secretary and former Conservative Party leader, whom he met at Oxford University. Mr Hague was best man at his wedding.

News
Netherlands' goalkeeper Tim Krul fails to make a save from Costa Rica's midfielder Celso Borges during a penalty shoot-out in the quarter-final between Netherlands and Costa Rica during the 2014 FIFA World Cup
newsGoalkeepers suffer from 'gambler’s fallacy' during shoot-outs
News
people
Travel
travel
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
PROMOTED VIDEO
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
arts + entsBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
News
Two giraffes pictured on Garsfontein Road, Centurion, South Africa.
i100
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
News
Kenny Ireland, pictured in 2010.
peopleBenidorm, actor was just 68
News
i100
Arts and Entertainment
arts + ents
News
people
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Morrissey pictured in 2013
people
News
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features playground gun massacre
News
i100
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Training Programme Manager (Learning and Development)-London

£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices