U.S. Court Rules Against Citi in EMI/Terra Firma Case

NEW YORK (Reuters) – A U.S. judge on Wednesday denied a request by Citigroup Inc (C.N) to move a lawsuit by Terra Firma Capital Partners Ltd to London in a dispute over the buyout house’s acquisition of EMI.

The order was a victory for Terra Firma Chairman and Chief Executive Guy Hands, who has become embroiled in an increasingly bitter legal dispute with the U.S. bank, which advised on and provided financing for Terra Firma’s 4 billion pound ($6.3 billion) acquisition of EMI Group PLC in 2007.

“For reasons that will be elaborated in a forthcoming written opinion, Citi’s motion is denied in its entirety,” U.S. District Court Judge Jed Rakoff said in a written order, three weeks after he heard oral arguments in Manhattan federal court.

Terra Firma asked the U.S. court to hear the case over its troubled deal for EMI, rather than shift the proceedings to London, a move it said could jeopardize the tax status of Hands, the firm’s founder.

A spokeswoman for Citi could not immediately be reached to comment.

The judge scheduled September 10 for a pre-trial conference in Manhattan federal court.

“We are pleased with today’s court ruling and are now focused on preparing for trial before Judge Rakoff in the fall of 2010,” Chris Duffy, attorney for Terra Firma, said in a statement.

The case is Terra Firma Investments vs. Citigroup, U.S. District Court for the Southern District of New York, No. 09-10459. (Reporting by Grant McCool; Editing by Bernard Orr)