Hands lives to fight another day in court after Terra Firma wins appeal on EMI deal
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Saturday 01 June 2013
A US appeals court has thrown out a 2010 ruling against a claim by Guy Hands that he had been tricked by Citigroup into overpaying for EMI, setting the stage for a fresh showdown between the private-equity mogul and the bank over the sale of the London-based music business.
Mr Hands’s Terra Firma Capital paid more than £4bn for EMI in 2007, at the height of the leveraged buyout bubble that popped when the credit crunch hit the financial sector.
The deal proved disastrous, and led to a bitter courtroom battle in which Mr Hands claimed he had been misled by David Wormsley, a high-profile Citigroup banker in London, into overpaying for the business. Citigroup helped finance the deal.
The allegation was rejected in a trial before US District Judge Jed Rakoff in 2010. Soon after, Citigroup took control of EMI and eventually broke up and sold the business.
However, yesterday the 2nd Circuit Court of Appeals ruled that Judge Rakoff had incorrectly instructed the jury in the original trial on the English legal provisions relevant to the case, and that the matter should therefore be retried.
Citigroup said it was hopeful that it would succeed once again when the case returns to court.
“The original verdict made clear that Terra Firma’s baseless accusations of fraud were simply an attempt to gain leverage in debt restructuring negotiations,” the bank said.
A spokesman for Terra Firma told Reuters: “We continue to believe that we have a strong claim, and with the jury instructions now resolved in our favour, we expect to prevail in any subsequent trial.”
- 3 The enemy within: People who hear voices in their heads are being encouraged to talk back
- 4 Phil Neville backtracks on Tomas Rosicky 'I'd smash him' comments from Match of the Day 2
- 5 British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Asteroid narrowly scrapes past Earth: how to watch the closest space rock for decades as it flies by
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Prince Philip set to be knighted by Australia: Celebrate by reading his greatest gaffes
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...