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Terra Firma drops U.S. lawsuit against Citigroup

Texas residents may be interested in the most recent development in the ongoing controversy between British financier Guy Hands and Citigroup Inc.. The two sides recently agreed to the dismissal of all claims in the U.S. portion of its business litigation. However, the agreement does allow Mr. Hands' company, Terra Firma Capital Partners, to pursue the suit in British courts.

The lawsuit is rooted in Terra Firma's 2007 purchase of EMI Group Ltd for $6.7 billion. EMI Group Ltd is a music company whose catalog included artists like the Beatles, David Bowie, Coldplay and Katy Perry. In the suit, Mr. Hands claims that a Citigroup banker told him that he'd need to raise his offer for the label to beat out a competing bid. Mr. Hands now claims that the banker's statements about a competing offer were false.

Terra Firma later defaulted on loans related to the purchase and EMI was seized by Citigroup. The bank then sold the label's assets in pieces. Citigroup disputes Mr. Hands's claims about the banker and says that the financier has buyer's remorse. It is expected that Terra Firma will continue the litigation in British courts.

International disputes can be complex because it is sometimes difficult to determine which court has jurisdiction. In this case, Terra Firma had filed suits in both the United States and England. Citigroup had complained that Hands was conducting "legal tourism" by filing suit in both countries. Citigroup had won an earlier trial, but the verdict was voided because the jury had received incorrect instructions about governing law. Those kinds of complexities can make international business litigation challenging.

Source: FOX Business , "Financier Hands drops U.S. lawsuit over EMI, pursuing UK case", Jonathan Stempel, March 07, 2014