Citigroup, Inc (NYSE: C) must face a lawsuit from private equity firm Terra Firma Capital Partners which accused the bank of tricking the firm into overpaying for EMI Group Ltd in 2007, ruled U.S. District Judge Jed Rakoff in Manhattan on Tuesday.
The New York-based bank had asked Judge Rakoff to dismiss the case, but the judge dismissed Citigroup’s bid to dismiss the charges of fraudulent misrepresentation and concealment. The judge also dismissed two of Terra Firma’s claims as well. The judge said a more detailed opinion explaining the ruling would be available in “due course.”
Terra Firma Capital Partners accuses Citigroup of leading it to believe that Cerberus Capital Management LP was also bidding for EMI, a music recording and publishing company, causing it to raise its bid. Citigroup argues that there was no evidence that banker David Wormsley was aware that Cerebrus wasn’t planning to bid when he told the buyout firm’s principal that Cerberus would bid 2.62 pounds per share of EMI.
Citigroup Inc. (Citigroup) is a global diversified financial services holding company. The Company provides consumers, corporations, governments and institutions with a range of financial products and services. As of December 31, 2009, Citigroup had approximately 200 million customer accounts and did business in more than 140 countries. Citigroup operates through two primary business segments: Citicorp, consisting of its Regional Consumer Banking (RCB) businesses and Institutional Clients Group (ICG), and Citi Holdings, consisting of its Brokerage and Asset Management (BAM), Local Consumer Lending (LCL), and Special Asset Pool (SAP). In April 2010, Barclays PLC acquired Italian credit card business of Citibank International Bank plc. In May 2010, the Company announced the creation of a new Collateral Management Services unit within its Securities and Fund Services business.
Shares of Citigroup, Inc (NYSE: C) traded down 1.25 % during mid-day trading on Tuesday.
