Terra Firma granted EMI retrial

Alice Murray
03 June 2013

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Terra Firma is to undergo a retrial over EMI as the private equity house continues to claim that Citigroup fraudulently forced it to overpay for the music group.

At the end of last week an appeal court in New York overturned the 2010 verdict, which favoured the bank. US Judge Jed Rakoff has called for a new trial because jurors had not been instructed properly on English law.

Terra Firma is confident that the new case will result in success this time around: "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," said a Terra Firma spokesperson.

Back in 2010, Terra Firma chairman Guy Hands claimed that Citi adviser David Wormsely gave false information concerning other bidders involved in the buying process, which led to the private equity firm paying £4.2bn for EMI in 2007.

In October 2010, a three-week court case took place in New York, which resulted in all claims against Citi being dropped.

Following the court case, EMI then fell into the hands of Citi – which was also a lender to the business – after it failed to keep up with interest repayments.