Citigroup, Inc (NYSE: C) has asked a federal judge to throw out a lawsuit relating to the purchase of EMI Group by Terra Firma Capital Partners, who accused Citigroup of tricking the firm into overpaying for the music company in 2007.
Terra Firma said that it was misled by New York-based Citigroup, Inc (NYSE: C) into believing that another firm, Cerberus Capital Management LP, was making a bid for the music and record publishing company, according to the suit.
Citi argued in federal court that there’s no evidence that Citigroup banker David Wormsley knew that Cerberus was not planning to bid when he told the buyout firm’s head, Guy Hands, that Cerberus planned on bidding $4.02 per share for EMI.
Terra Firma lawyer David Boies said that the evidence in the case shows that Citigroup discussed a bid by Cerberus which caused it to raise its own bid. The buyout firm claimed that Wormsley misled hands in a series of phone conversations in May of 2007. Boies said in a hearing that, “They are continuing to say that there is another bidder and that it was Cerberus.”
Terra Firm said in court papers that “Wormsley’s statements about the purported Cerberus bid were the pivotal factor in Terra Firma’s decision to place a bid for EMI when it did, and at the price it did.” The firm hopes to recover “lost equity of billions of dollars” and obtain punitive damages from Citigroup.
Federal Court Judge Jed Rakoff will decide whether or not to dismiss the case by September 15th.
