Bloomberg / BusinessWeek
Terra Firma Capital Partners Ltd. lawyer David Boies made closing arguments in a $2.2. billion lawsuit against Citigroup Inc. over the auction of EMI Group Ltd., a trial the judge called “a cat-fight between two rich companies.”
Guy Hands, chairman of the private-equity firm, alleged Citigroup banker David Wormsley misled him in the 2007 auction, causing Terra Firma to overbid for the London-based music company. Hands claimed during the trial in Manhattan federal court that Wormsley falsely told him in the days before the May auction that Cerberus Capital Management LP planned to bid.
Cerberus had decided not to bid, leaving Terra Firma without competition. Citigroup claims Wormsley said nothing to mislead Hands, and that Terra Firma only claimed it was defrauded after unsuccessful negotiations to restructure the debt. Terra Firma said if it knew Cerberus wasn’t bidding, it would have sought more information about EMI’s finances.
“If they hadn’t believed Cerberus was bidding, if they didn’t believe there was an active auction, why would they have gone ahead and submitted a bid?” Terra Firma lawyer David Boise asked jurors.
In a series of rulings over the past week, U.S. District Judge Jed Rakoff has narrowed the range of damages jurors may consider in the case, from $8.3 billion to $2.2 billion. Rakoff also said that punitive damages aren’t appropriate in the case, which he called “a cat-fight between two rich companies.”
Separately, Rakoff also ejected a juror yesterday who had a link to a Michael Moore film about the 2008 financial crisis.
She was thrown off the jury after the judge commented on the movie’s alleged appeal to “anti-bank prejudice.”
Guy Hands, chairman of the private-equity firm, alleged Citigroup banker David Wormsley misled him in the 2007 auction, causing Terra Firma to overbid for the London-based music company. Hands claimed during the trial in Manhattan federal court that Wormsley falsely told him in the days before the May auction that Cerberus Capital Management LP planned to bid.
Cerberus had decided not to bid, leaving Terra Firma without competition. Citigroup claims Wormsley said nothing to mislead Hands, and that Terra Firma only claimed it was defrauded after unsuccessful negotiations to restructure the debt. Terra Firma said if it knew Cerberus wasn’t bidding, it would have sought more information about EMI’s finances.
“If they hadn’t believed Cerberus was bidding, if they didn’t believe there was an active auction, why would they have gone ahead and submitted a bid?” Terra Firma lawyer David Boise asked jurors.
In a series of rulings over the past week, U.S. District Judge Jed Rakoff has narrowed the range of damages jurors may consider in the case, from $8.3 billion to $2.2 billion. Rakoff also said that punitive damages aren’t appropriate in the case, which he called “a cat-fight between two rich companies.”
Separately, Rakoff also ejected a juror yesterday who had a link to a Michael Moore film about the 2008 financial crisis.
She was thrown off the jury after the judge commented on the movie’s alleged appeal to “anti-bank prejudice.”
