The first day of testimony in Terra Firma's lawsuit against Citigroup began as a battle of dueling timelines.

In questioning Terra Firma's Tim Pryce, who is currently CEO for the investment firm but was general counsel at the time of its acquisition of EMI, Terra Firma's lawyer, David Boies, chairman and managing partner of Boies, Schiller & Flexner LLP, tried to draw a timeline that showed that the firm was fraudulently induced to make an inflated bid for EMI.

In testimony, Pryce said that Terra Firma chairman Guy Hands had told him that the auction had been moved up from May 23 to May 21, and that Cerberus was planning to bid 2.62 pounds per EMI share.

Citigroup, which had multiple roles in the deal including serving as an investment advisor to EMI, had conveyed to Terra Firma that it was in the position to lend the private equity firm the funds to pay for the deal, but it would have to "move quickly." When asked what the implication of that information was, Pryce answered, "I think it meant that we would have to put in a binding bid."

Since EMI's sale was set up as an auction, Terra Firma had no say in when the bids were due and a timetable impacts the buyers ability to perform due diligence, Pryce said. Terra Firma always preferred not to bid in auctions because then the investment firm has an opportunity to negotiate better prices, he added.

Over the weekend of May 18-May 21, the Terra Firma executives involved in the deal recommended to the company's general partners that the firm bid 2.65 pounds to 2.85 pounds per share of EMI, Pryce said.

Months later, Hands said he was suspicious that Cerberus had never made a binding bid on EMI. Pryce added that in September 2007, Hands asked him to conduct an investigation, which lasted until the second quarter of 2008. The question of why Terra Firma didn't file the lawsuit sooner than December 2009 was disallowed by the US. Southern District of New York Judge Jed Rakoff.

But Citigroup lawyer Jay Cohen, a partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in cross-examining questioned Pryce on a letter dated May 8 that shows that Terra Firma was already prepared to make an offer of 2.65 pounds a share. In further questioning, it was established that Terra Firma had been considering making that acquisition in February 2007 and had already hired a financial investment advisor, a music industry consulting firm, an accounting firm and a law firm to help it research that acquisition.