Terra Firma Capital Partners LP has asked a U.S. appeals court for a new trial over its claims that it was deceived by Citigroup Inc. while bidding for EMI Music, according to numerous reports. The case originally went to trial in October 2010. A jury deliberated less than a day after a two-and-a-half-week trial.
The private equity firm alleges Citigroup, which financed Terra Firma's eventual acquisition of EMI, convinced Terra Firma there was another bidder interested in the music company in 2007.
A jury found Citigroup did not trick Terra Firma into overpaying for EMI in 2007. Citigroup provided loans for £4 billion acquisition. But EMI proved to be a more difficult challenge than Terra Firma expected. The company needed to inject additional equity into EMI to meet its debt covenants with Citi.
The lawsuit was widely seen as a last-ditch effort by Terra Firma to retain ownership of EMI. Citi took over ownership of EMI in February 2011. EMI's debt was reduced by 65% from £3.4 billion to £1.2 billion in a debt-for-equity swap.
Now with EMI split into two - recorded music assets with Universal Music Group, publishing assets with a consortium led by Sony/ATV - Terra Firma would be able to get back some of the money it lost on the deal.