Citigroup dispute with Terra Firma set for trial

15 September 2010

Citigroup’s ongoing dispute with Terra Firma over claims it misled the firm during its acquisition of music company EMI is set to go to trial, a judge in the US has ruled.

The latter has accused Citigroup investment chief David Worsmley of presenting the firm with inaccurate information relating to a rival bid for the company.

Terra Firm stated that Guy Hands, the chairman of the business, was informed that private equity firm Cerebus Capital Management were poised to launch a bid.

This led to the firm paying an over-inflated price of more than £4 billion for EMI, it has argued.

In a statement, the Terra Firm said: “We are pleased that Judge Rakoff has rejected Citi’s attempt to avoid a trial on both of Terra Firma’s fraud claims.

“We look forward to the beginning of the trial on October 18th, when Citi will have to answer to a group of New York jurors.”

The judge rejected two allegations of negligent misrepresentation and tortious interference although claims of fraudulent misrepresentation and fraudulent concealment will be heard when the trial goes ahead later in the year.

Citigroup previously argued that there was no evidence available to substantiate the claims.

By Jim Ottewill

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