Terra Firma Vs. Citigroup Trial Over EMI Goes To The Jury
November 4, 2010 at 11:51 AM (PT)
The jury in MANHATTAN has begun deliberating whether CITIGROUP tricked TERRA FIRMA into buying EMI in 2007 at an inflated price.
CITIGROUP lawyer TED WELLS told the jury in the EMI trial between TERRA FIRMA CEO GUY HANDS and CITIGROUP YESTERDAY (11/2), that "In hindsight, we shouldn't have loaned [HANDS] the money." THE NEW YORK POST reports, "WELLS made the biting admission during the closing arguments of a three-week long, multi-billion-dollar fraud case that pitted HANDS against his one-time buddy, CITI banker DAVID WORMSLEY. WELLS said CITI has already acknowledged the disastrous deal by writing down the value of the loans it extended HANDS."
"We've written down $2 billion. That's a fact," WELLS said. "But we went into this with our eyes wide open. We gotta live with our bad business decisions and so does [HANDS]."
The trial has featured several stunning moments.
HANDS testified early in the trial that his firm would not have bid on EMI if he'd known there were no other bidders (NET NEWS 10/20). At day two of the trial, HANDS claimed that CITIGROUP's DAVID WORMSLEY "tricked him into overpaying for EMI, a 113-year-old music company, in a 2007 auction." HANDS claimed WORMSLEY lied to him in a series of phone conversations over the days leading up to the MAY 21st, 2007 auction for EMI, falsely telling him that CERBERUS CAPITAL MANAGEMENT planned to submit a competing bid."
A week later (NET NEWS 10/27) WORMSLEY was on the stand, testifying after HANDS called him a liar, WORMSLEY said he was actually the victim of a lie told by HANDS during his pursuit of EMI. WORMSLEY accused HANDS of besmirching his good name by telling an EMI adviser, SIMON BORROWS at GREENHILL & CO., that a bid of 240 pence ($3.80) a share was good enough to win the auction.
Earlier this week (NET NEWS 11/2), HANDS was handed a second setback, when U.S. District Judge JED RAKOFF ruled that he would get no more than 25% of the $8 billion in damages initially sought in his case against CITIGROUP over the 2007 acquisition of EMI.
In his closing arguments, TERRA FIRMA attorney DAVID BOIES argued that "WORMSLEY fibbed to his friend to encourage him to bid up the music company -- charges he said are corroborated by other officials who have offered testimony over the past three weeks," reports THE POST.
WELLS summed up, taking a shot at EMI, "The problem with turning the company around is that nobody buys records anymore. They download songs. He couldn't fight technology."