By Grant McCool
NEW YORK, Oct 20 (Reuters) - Terra Firma buyout house chief executive Guy Hands testified on Wednesday he had no paper trail to support his allegations that a Citigroup Inc banker friend lied to him in three May 2007 phone calls about bidding for iconic music company EMI.
Asked during hours of tense cross-examination in a New York court by Citigroup's high-profile trial lawyer Ted Wells whether he was aware of 'any piece of paper in the company' of those conversations, Hands replied: 'I have no bits of paper' and 'I am not personally aware of any, no.'
On Tuesday, financier Hands told the nine jurors who will decide his fraud claim in U.S. District Court that he would not have paid 265 pence per share for EMI had his onetime Citigroup banker friend, David Wormsley, not told him of a 262 pence per share bid by rival private equity firm Cerberus Capital Management.
There was no other bid and Terra Firma Capital Partners says it overpaid in its 4 billion pound ($6.4 billion) deal, which came to epitomize the perils of loading companies with debt and the associated risks in the leveraged buyout bubble.
Evidence presented in court showed Hands, 51, and Wormsley remained business associates and friends after the EMI deal closed, attending dinner parties, the opera and going on holiday together with their wives. Wormsley, 50, who has sat just feet away from Hands in court, is expected to tell his side of the story later in the trial.
The trial began on Monday. Terra Firma is seeking as much as $8 billion in damages from Citigroup, which denies the allegations. It says the buyout house sued in 2009 after it realized it made a bad business deal.
Citigroup provided 2.6 billion pounds ($4 billion) in loans for the purchase of EMI, which is struggling under the weight of its debt and trying to keep itself out of the hands of the bank. The recording company is known for having stars such as Nat King Cole, The Beatles, Pink Floyd and scores of others on its label.
The trial centers around three telephone conversations between Hands and Wormsley in the days leading up to the May 21 deadline for bids to buy the flagging company.
'I cannot remember details of conversations, but the fact that we came to 265 (pence per share) was after conversations with Mr Wormsley,' said Hands, whose voice trembled at times under cross-examination.
Under questioning on Tuesday by his own high-profile lawyer, David Boies, Hands testified that Wormsley told him on the eve of the deadline 'we had to get in' to beat Cerberus and 'he told me not to play any games with the price.'
The case is Terra Firma et al v Citigroup et al, U.S. District Court for the Southern District of New York, No. 09-10459.
$1 = 0.6364 pound
(Reporting by Grant McCool, editing by Matthew Lewis)
((grant.mccool@thomsonreuters.com; + 1 212-393-9461; Reuters Messaging: grant.mccool.reuters.com@reuters.net)) Keywords: TERRAFIRMA/CITIGROUP
* Second day on witness stand for British financier Hands
* Citigroup denies fraud claim seeking $8 bln damages
* Case centers on three May 2007 calls about EMI buyout
(Adds Hands testimony about recall of board meeting)
By Grant McCool
NEW YORK, Oct 20 (Reuters) - Chocolate biscuits and a disputed telephone conversation with a Citigroup Inc banker friend -- that is all the detail British buyout house boss Guy Hands said he could remember on Wednesday about a board meeting the day before his ill-fated May 2007 bid for EMI.
Terra Firma Capital Partners Ltd founder Hands, pressing an $8 billion damages claim against Citigroup, also testified at trial in New York that he had no document to support his allegations banker David Wormsley lied to him in three phone calls about a rival bid.
During hours of tense cross-examination, Citigroup trial lawyer Ted Wells asked Hands: 'The only thing you can remember is the conversation with David Wormsley and chocolate biscuits?' from a May 20, 2007 Terra Firma board meeting.
Hands replied: 'That is correct, in detail.'
He said he could remember 'how close the plane was' at the meeting in an airport hangar on the English Channel island of Guernsey, but not the meeting details or documents.
He said he remembers being hungry and asking for chocolate biscuits to eat.
Terra Firma says it overpaid in its 4 billion pound ($6.4 billion) deal for the storied music label, EMI, which came to epitomize the perils of loading companies with debt and the associated risks in the leveraged buyout bubble. Citigroup provided 2.6 billion pounds ($4 billion) in loans for the purchase of EMI, which is struggling under the weight of its debt.
Citigroup denies the allegations of fraud. It says the buyout house sued in December 2009 after it realized it made a bad business deal.
Hands had testified on Tuesday that Wormsley called him during the Sunday board meeting and on two other occasions. He said Wormsley told him of a 262 pence per share bid for EMI coming from rival private equity firm Cerberus Capital Management LP and that Terra Firma should bid high.
The bidding deadline was May 21.
The financier told the nine jurors who will decide his fraud claim in U.S. District Court that he would not have paid 265 pence per share for EMI without relying on Wormsley, a man he trusted. As it turned out, there was no other bid.
Wells repeatedly questioned Hands about whether he had a note or 'any piece of paper in the company' about three phone conversations with Wormsley, in which the banker purportedly spoke of the Cerberus bid and price.
'I do not have a note, but that's what he said,' testified Hands, 51, who remained business associates and friends with Wormsley after the EMI deal closed, attending dinner parties, the opera and going on holiday together with their wives.
The music recording and music publishing company is known for stars such as Nat King Cole, The Beatles, Pink Floyd and scores of others.
Wormsley, 50, who has sat just feet away from Hands in court, is also expected to tell jurors his side of the story.
Hands has told the court the decision to sue was a 'very, very last resort' after settlement negotiations failed to resolve the dispute.
The case is Terra Firma et al v Citigroup et al, U.S. District Court for the Southern District of New York, No. 09-10459.
$1 = 0.6364 pound
(Editing by Matthew Lewis and Andre Grenon) Keywords: TERRAFIRMA/CITIGROUP (grant.mccool@thomsonreuters.com +1-212-393-9461; Reuters Messaging: grant.mccool.reuters.com@reuters.net) 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.
NEW YORK, Oct 20 (Reuters) - Terra Firma buyout house chief executive Guy Hands testified on Wednesday he had no paper trail to support his allegations that a Citigroup Inc banker friend lied to him in three May 2007 phone calls about bidding for iconic music company EMI.
Asked during hours of tense cross-examination in a New York court by Citigroup's high-profile trial lawyer Ted Wells whether he was aware of 'any piece of paper in the company' of those conversations, Hands replied: 'I have no bits of paper' and 'I am not personally aware of any, no.'
On Tuesday, financier Hands told the nine jurors who will decide his fraud claim in U.S. District Court that he would not have paid 265 pence per share for EMI had his onetime Citigroup banker friend, David Wormsley, not told him of a 262 pence per share bid by rival private equity firm Cerberus Capital Management.
There was no other bid and Terra Firma Capital Partners says it overpaid in its 4 billion pound ($6.4 billion) deal, which came to epitomize the perils of loading companies with debt and the associated risks in the leveraged buyout bubble.
Evidence presented in court showed Hands, 51, and Wormsley remained business associates and friends after the EMI deal closed, attending dinner parties, the opera and going on holiday together with their wives. Wormsley, 50, who has sat just feet away from Hands in court, is expected to tell his side of the story later in the trial.
The trial began on Monday. Terra Firma is seeking as much as $8 billion in damages from Citigroup, which denies the allegations. It says the buyout house sued in 2009 after it realized it made a bad business deal.
Citigroup provided 2.6 billion pounds ($4 billion) in loans for the purchase of EMI, which is struggling under the weight of its debt and trying to keep itself out of the hands of the bank. The recording company is known for having stars such as Nat King Cole, The Beatles, Pink Floyd and scores of others on its label.
The trial centers around three telephone conversations between Hands and Wormsley in the days leading up to the May 21 deadline for bids to buy the flagging company.
'I cannot remember details of conversations, but the fact that we came to 265 (pence per share) was after conversations with Mr Wormsley,' said Hands, whose voice trembled at times under cross-examination.
Under questioning on Tuesday by his own high-profile lawyer, David Boies, Hands testified that Wormsley told him on the eve of the deadline 'we had to get in' to beat Cerberus and 'he told me not to play any games with the price.'
The case is Terra Firma et al v Citigroup et al, U.S. District Court for the Southern District of New York, No. 09-10459.
$1 = 0.6364 pound
(Reporting by Grant McCool, editing by Matthew Lewis)
((grant.mccool@thomsonreuters.com; + 1 212-393-9461; Reuters Messaging: grant.mccool.reuters.com@reuters.net)) Keywords: TERRAFIRMA/CITIGROUP
* Second day on witness stand for British financier Hands
* Citigroup denies fraud claim seeking $8 bln damages
* Case centers on three May 2007 calls about EMI buyout
(Adds Hands testimony about recall of board meeting)
By Grant McCool
NEW YORK, Oct 20 (Reuters) - Chocolate biscuits and a disputed telephone conversation with a Citigroup Inc banker friend -- that is all the detail British buyout house boss Guy Hands said he could remember on Wednesday about a board meeting the day before his ill-fated May 2007 bid for EMI.
Terra Firma Capital Partners Ltd founder Hands, pressing an $8 billion damages claim against Citigroup, also testified at trial in New York that he had no document to support his allegations banker David Wormsley lied to him in three phone calls about a rival bid.
During hours of tense cross-examination, Citigroup trial lawyer Ted Wells asked Hands: 'The only thing you can remember is the conversation with David Wormsley and chocolate biscuits?' from a May 20, 2007 Terra Firma board meeting.
Hands replied: 'That is correct, in detail.'
He said he could remember 'how close the plane was' at the meeting in an airport hangar on the English Channel island of Guernsey, but not the meeting details or documents.
He said he remembers being hungry and asking for chocolate biscuits to eat.
Terra Firma says it overpaid in its 4 billion pound ($6.4 billion) deal for the storied music label, EMI, which came to epitomize the perils of loading companies with debt and the associated risks in the leveraged buyout bubble. Citigroup provided 2.6 billion pounds ($4 billion) in loans for the purchase of EMI, which is struggling under the weight of its debt.
Citigroup denies the allegations of fraud. It says the buyout house sued in December 2009 after it realized it made a bad business deal.
Hands had testified on Tuesday that Wormsley called him during the Sunday board meeting and on two other occasions. He said Wormsley told him of a 262 pence per share bid for EMI coming from rival private equity firm Cerberus Capital Management LP and that Terra Firma should bid high.
The bidding deadline was May 21.
The financier told the nine jurors who will decide his fraud claim in U.S. District Court that he would not have paid 265 pence per share for EMI without relying on Wormsley, a man he trusted. As it turned out, there was no other bid.
Wells repeatedly questioned Hands about whether he had a note or 'any piece of paper in the company' about three phone conversations with Wormsley, in which the banker purportedly spoke of the Cerberus bid and price.
'I do not have a note, but that's what he said,' testified Hands, 51, who remained business associates and friends with Wormsley after the EMI deal closed, attending dinner parties, the opera and going on holiday together with their wives.
The music recording and music publishing company is known for stars such as Nat King Cole, The Beatles, Pink Floyd and scores of others.
Wormsley, 50, who has sat just feet away from Hands in court, is also expected to tell jurors his side of the story.
Hands has told the court the decision to sue was a 'very, very last resort' after settlement negotiations failed to resolve the dispute.
The case is Terra Firma et al v Citigroup et al, U.S. District Court for the Southern District of New York, No. 09-10459.
$1 = 0.6364 pound
(Editing by Matthew Lewis and Andre Grenon) Keywords: TERRAFIRMA/CITIGROUP (grant.mccool@thomsonreuters.com +1-212-393-9461; Reuters Messaging: grant.mccool.reuters.com@reuters.net) 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.