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EMI fraud trial gets underway

Terra Firma suing Citigroup over purchase

Attorneys for plaintiff Terra Firma Capital Partners and defendant Citigroup gave opening arguments in New York state Supreme Court on Monday in the fraud case involving Terra Firma’s 2007 purchase of EMI Music.

David Boies, representing Terra Firma, said lender Citigroup falsely claimed that other companies were bidding on the music company when there actually were none.

In its action, filed in December, Terra Firma alleged that as a result of Citigroup’s representations, it paid an inflated price of $4.9 billion for EMI.

Citigroup’s attorney Theodore Wells countered that Citigroup was guilty of no wrongdoing and never lied to Terra Firma. He said the equity company wants to blame its bankers because its investment in EMI has proved to be a bad one.

EMI — home to such acts as Katy Perry, Lady Antebullum and Gorillaz — has struggled to meet its loan covenants for EMI, and the company has undergone several changes in top management and a major restructuring since the filing of Terra Firma’s suit.

Terra Firma is seeking monetary damages to be determined in the case.

(The Associated Press contributed to this report.)

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