Terra Firma to get trial over EMI deal
Thursday 16 September 2010
Guy Hands' Terra Firma can proceed to trial against Citigroup in their dispute over Terra's 2007 acquisition of the music group EMI, a US federal judge ruled late on Tuesday night.
The buyout house alleges in its lawsuit that Citigroup inflated the price of EMI by not revealing that the only remaining bidder had withdrawn from the auction. Terra Firma bought EMI for more than £4bn at the height of the buyout bubble and its high debt burden and a weak performance have crippled the business and sent the buyout firm back to investors for money to meet bank covenants.
Lawyers for Citigroup had argued that the case should be resolved in its favour before trial. But US District Judge Jed Rakoff allowed Terra Firma's claims for fraudulent misrepresentation and fraudulent concealment to proceed to a jury next month.
It looks very much as though 2015 will be a good year for the world economy, after all – and, if it is, that will be thanks to the fall in the oil price. It won't be good for everyone and we have already seen the pressure it puts on the Russian leadership – though, before you conclude that sometimes there is natural justice in the world, remember that the people who are hurt are not leaders such as Vladimir Putin. Other oil- and gas-exporting countries are damaged, too, and I think we will see further fallout in unpredictable ways. But the net impact is strongly positive, more so than most commentators at present acknowledge. The winners far outnumber the losers.
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