) and British financier, Guy Hands mutually ended their
litigation in the U.S, which has been stretching over four years.
The lawsuit was related to Terra Firma Capital Partners, the
private equity firm owned by Guy Hands, which purchased EMI Group
Ltd. in 2007. However, both parties agreed to pursue the case in
CITIGROUP INC (C): Free Stock Analysis Report
FIFTH THIRD BK (FITB): Free Stock Analysis
PNC FINL SVC CP (PNC): Free Stock Analysis
SONY CORP ADR (SNE): Free Stock Analysis
To read this article on Zacks.com click here.
In 2007, Guy Hands and his private equity team at Terra Firma
offered $6.7 billion (£4 billion) as the bidding amount for EMI
but failed to meet the loan payments provided by Citigroup to
finance the deal. Therefore, Citigroup finally took over EMI and
in Nov 2011, it vended EMI it into two parts.
EMI's recorded music division, EMI Music was sold to Vivendi's
Universal Music Group (UMG) for $1.9 billion (£1.2 billion),
while the publishing division was sold to a group of investors
led by Sony Corporation of America (SCA) - a U.S. subsidiary of
) - for $2.2 billion.
Back in Dec 2009, Guy Hands filed a lawsuit against Citigroup
claiming that a Citi banker convinced him to buy EMI at a higher
price. Terra Firma claimed $8 billion (£5 billion) as damages,
which was reduced to $2 billion at a trial.
Further, in 2013, a federal appeals court turned down a 2011 jury
verdict, which was in favor of Citigroup. As per the verdict,
Citigroup was cleared of committing any wrongdoing against Tierra
Firma. Therefore, the federal court's move provided a fair
opportunity to Guy Hands to seek compensation for the bank's
However, Citigroup denied the allegations and in turn accused Guy
Hands of being involved in "legal tourism" by trying to prove his
claims in both the U.S. and England prior to the mutual agreement
last week. Finally, both parties agreed to common terms and
conditions and dismissed the case in the U.S.
Pending lawsuits are not only a burden on a company's financials,
but also dent its reputation and therefore resolving such issues
at the earliest are in the best interests of any organization.
Currently, Citigroup carries a Zacks Rank #4 (Sell).
Some better ranked major regional banks include
Fifth Third Bancorp
The PNC Financial Services Group, Inc.
), with a Zacks Rank #2 (Buy).