DETROIT, Oct 16 (Reuters) - Citigroup Inc and Terra Firma Capital Partners Ltd founder Guy Hands held settlement talks this week aimed at resolving a legal dispute over the 2007 sale of debt-laden music label EMI, the Wall Street Journal reported on Saturday.
The talks between British financier Hands and Citi broke down on Wednesday, the newspaper said, quoting two people familiar with the matter.
But negotiations could restart over the weekend even though the two sides remain apart on terms for a settlement, the newspaper said.
A trial in the lawsuit by Terra Firma is set to begin in federal court in New York on Monday.
Terra Firma has sued Citi on the claim that the bank tricked the private equity group into overpaying for EMI by misrepresenting the competition in the auction for the music label.
The 2009 lawsuit against Citigroup accuses the bank of inflating the 4 billion pound ($6.3 billion) price of EMI by not revealing that its U.S. rival Cerberus Capital Management had pulled out of the auction. Citigroup denies the claims.
The trial comes at a sensitive time for Citi, which is scheduled to report earnings on Monday and is struggling to distance itself from its near collapse during the credit crisis of 2008.
Mediation talks between the two sides last month failed to produce an agreement.
The newspaper said that the framework of the most recent settlement talks between Terra Firma and Citi was similar to a deal that had been proposed about a year ago.
Under that arrangement, Terra Firma would recapitalize EMI with additional equity and Citi would write off some of the 3 billion pounds ($4.8 billion) it loaned Terra Firma to finance the deal.
(Editing by Xavier Briand) Keywords: CITI/TERRAFIRMA (kevin.krolicki@thomsonreuters.com; + 1 313 967 1902) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The talks between British financier Hands and Citi broke down on Wednesday, the newspaper said, quoting two people familiar with the matter.
But negotiations could restart over the weekend even though the two sides remain apart on terms for a settlement, the newspaper said.
A trial in the lawsuit by Terra Firma is set to begin in federal court in New York on Monday.
Terra Firma has sued Citi on the claim that the bank tricked the private equity group into overpaying for EMI by misrepresenting the competition in the auction for the music label.
The 2009 lawsuit against Citigroup accuses the bank of inflating the 4 billion pound ($6.3 billion) price of EMI by not revealing that its U.S. rival Cerberus Capital Management had pulled out of the auction. Citigroup denies the claims.
The trial comes at a sensitive time for Citi, which is scheduled to report earnings on Monday and is struggling to distance itself from its near collapse during the credit crisis of 2008.
Mediation talks between the two sides last month failed to produce an agreement.
The newspaper said that the framework of the most recent settlement talks between Terra Firma and Citi was similar to a deal that had been proposed about a year ago.
Under that arrangement, Terra Firma would recapitalize EMI with additional equity and Citi would write off some of the 3 billion pounds ($4.8 billion) it loaned Terra Firma to finance the deal.
(Editing by Xavier Briand) Keywords: CITI/TERRAFIRMA (kevin.krolicki@thomsonreuters.com; + 1 313 967 1902) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.