Terra Firma Capital Partners has withdrawn its £2.3bn claim against Citigroup just days after the trial started at London’s High Court.
With the dispute having lasted more than six years of litigation in both New York and London, Guy Hands’ private equity group alleged Citi investment bankers had misled him into a deal for the £4.2bn purchase of the now-defunct record label EMI in 2007.
The firm said it lost more than £1.5bn with Hands claiming he had personally lost more than £150m. Having begun on Tuesday (7 June) the high profile trial lasted just four and a half days despite being scheduled for seven weeks.
Terra Firma alleged senior bankers made fraudulent statements to Hands in relation to the auction process and the provision of financing. In a surprise turn of events, those allegations have now been withdrawn unreservedly and the private equity group said it would pay Citi’s costs after the case collapsed in court today.
The collapse of Terra Firma’s case followed just two days of cross-examination of Hands. Hands was expected to continue giving evidence for the whole of the following week.
Brick Court Chambers’ Mark Howard QC was instructed by Clifford Chance for Citi while One Essex Court’s Lord Grabiner was instructed by Mishcon de Reya.
A statement released by Citi today said: ‘We have always maintained the allegations made were entirely baseless and that Citi, specifically David Wormsley, Michael Klein and Chad Leat, acted at all times with absolute honesty and professional integrity throughout the EMI transaction. We are very pleased Terra Firma has unreservedly withdrawn the allegations, agreed to the dismissal of the proceedings and will pay Citi’s costs in relation to this matter.’
A statement by Brick Court Chambers added: ‘In the immortal words of the Rolling Stones, one of the artists in the EMI fold acquired by Terra Firma: “it’s all over now”.’