Via: Daily Swarm

British equity firm Terra Firma Investments has sued Citigroup Inc., claiming it paid a “fraudulently inflated price” of 4 billion pounds for EMI‘s label and music publishing interests in 2007 as a result of misrepresentations made by the lender. In the action, filed Friday in New York Supreme Court, Terra Firma claims to have lost equity in the billions of dollars as a result of its heavily leveraged purchase of the struggling music company.

The suit adds that Citi has “sought to wrest control of EMI by pushing it into, or to the brink of bankruptcy.” The lender could then sell the insolvent firm to its competitor Warner Music Group, “thus maximizing its recovery on its EMI-related loans, and generating additional investment banking fees from Warner.”
However, Citi executive David Wormsley purportedly told Terra Firma chief executive Guy Hands that another equity firm, Cerberus Capital Management, planned to place a bid on EMI. In response to this false information, Terra Firma placed a binding bid on EMI. - Variety