×
You will be redirected back to your article in seconds

Court Overturns Citigroup Verdict in EMI Purchase

A New York appellate court has overturned a 2010 verdict favoring lender Citigroup in Terra Firma Investments’ fraud suit over its 2007 purchase of EMI Music.

While Friday’s decision by the U.S. Court of Appeals for the Second District will have no impact on the breakup and sale of EMI’s label and music publishing assets, it could end up costing Citigroup, which had prevailed in U.S. District Court in 2010.

The decision issued by the three-judge panel in Manhattan said, “Because the district court’s jury instructions were based on an inaccurate understanding of the relevant English law, the case must be vacated and remanded for a new trial.”

A new round in court could prove costly to Citigroup: Terra Firma had originally sought $8.3 billion in potential damages, which were reduced to $2.3 billion by the original federal trial judge, Jed Rakoff, who would hear the retrial should it occur. (The parties also have the option of settlement.)

Led by financier Guy Hands, Terra Firma had purchased EMI for $6.3 billion on the eve of the collapse of international financial markets. Citigroup had acted as an advisor on the sale and was also Terra Firma’s main creditor, having supplied $4.2 billion in loans.

At trial, Terra Firma’s attorneys contended that Citigroup had fraudulently driven up the per-share price of EMI by falsely claiming that another equity firm was entering a bid in the auction of EMI.

However, the plaintiff could offer no “smoking gun” in the case, and jurors rejected Terra Firma’s allegations after just four hours of deliberation.

In February 2011, Citigroup took control of debt-burdened EMI from Terra Firma. The company was subsequently put up for sale and broken up in 2012, with Universal Music Group acquiring its labels for $1.9 billion and an investment group led by Sony buying its publishing unit for $2.2 billion.

More Music

  • Alicia Keys23rd Annual Hollywood Film Awards,

    Alicia Keys Will Return as 2020 Grammy Awards Host

    Alicia Keys will return as the host of the 62nd annual Grammy Awards. Keys hosted the awards show for the first time in 2019. She will become the third woman and the first female music star to host the show twice. Keys has won 15 Grammy awards and is second only to Paul Simon as [...]

  • Lady Antebellum and Halsey53rd Annual CMA

    Halsey Puts the Extra Lady in Lady Antebellum in Elegant CMA Awards Medley

    Halsey is increasingly proving herself a woman for all seasons in her varied TV appearances and awards show collaborations, and Wednesday’s CMA Awards telecast was no exception, as she ingratiated herself into the country vocal trio Lady Antebellum for some flawless four-part harmony on a medley of two of their respective hits. She and Lady [...]

  • Drummers Steve Gorman, left, and Dave

    Steve Gorman Calls The Black Crowes' Reunion ‘Sad’

    The Black Crowes made waves this week when they officially announced a lengthy reunion tour to celebrate the 30th anniversary of their debut album “Shake Your Money Maker.” The news was chiefly met with excitement and positive vibes, including glowing reviews of their first show in six years at the Bowery Ballroom in New York [...]

  • Lil Nas X53rd Annual CMA Awards,

    CMA Awards 2019: Full Winners List (Updating Live)

    The CMA Awards are taking place at the Bridgestone Arena in Nashville Wednesday night, with Carrie Underwood, Reba McEntire, and Dolly Parton hosting. The ceremony is airing live on ABC. Maren Morris leads the nominations with six total. Nominees and winners were selected by more than 7,400 industry professional members from the Country Music Association. [...]

  • Billie Eilish performs during Music MidTown

    Song Review: Billie Eilish’s ‘Everything I Wanted’ (Listen)

    Virtually everything about Billie Eilish’s career has been against the grain, unusual or at least unlike basically everyone else, and that’s also the case with “Everything I Wanted,” her first new song since July’s “Bad Guy” remix with Justin Bieber. Frankly, it couldn’t be much further from “Bad Guy”: Neither a menacing banger like that [...]

  • Paradigm's Liz Morentin portrait session in

    Paradigm's Executive VP of Communications Liz Morentin to Exit Agency

    Liz Morentin is stepping down from her role as executive vice president of communications at Paradigm, Variety has learned. According to an individual with knowledge of the situation, Morentin’s departure was amicable and she will stay on at the agency through the end of the year to help with the transition. No replacement has been named at [...]

  • Carrie UnderwoodThe Grand Ole Opry, Nashville,

    How to Watch the 2019 CMA Awards Online

    Carrie Underwood fans can catch her hosting the 53rd annual Country Music Association Awards Wednesday night. While her usual co-host Brad Paisley has bowed out of the gig this year, Underwood will continue her 12-year streak with Reba McEntire and Dolly Parton joining her. Together, the three will celebrate the biggest names in today’s country [...]

More From Our Brands

Access exclusive content