NEW YORK (CelebrityAccess MediaWire) — A federal judge has rejected a bid by Citigroup to have a lawsuit brought against them by private equity investor Terra Firma, dropped. Terra Firma accused the banking conglomerate of tricking Terra Firma into buying EMI, dropped.
Citigroup had argued that the case should fall under the jurisdiction of UK courts, but U.S. District court Judge Jed Rakoff said that none of the deal documents between the two companies stipulate England as a venue for lawsuits.
Rakoff also noted that there were legitimate reasons for the case to be heard in the U.S.
"As to the public factors, there is a legitimate U.S. interest in learning whether Citi, a major American bank, may be liable for fraudulent inducement, and thus subject to substantial damages," Rakoff wrote.
In the suit, Terra Firma have alleging that they overpaid for EMI after Citigroup led them to believe that another private equity investor Cerberus was also expressing interest in the label group and that Terra Firma would lose out on the deal if they didn't sweeten their offer.
EMI has proven to be less of a bargain than Terra Firma has hoped and the company has faced significant financial losses since acquiring EMI in a leveraged buyout in 2007. – CelebrityAccess Staff Writers