Hands recalls banker, biscuits on eve of EMI bid
NEW YORK (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)
- White House reverses, says Obama met uncle and lived with him during law school
- Flights delayed as air pollution hits record in Shanghai
- South Africa mourns Mandela, will bury him on December 15 |
- Analysis: Boeing bidders dangle goodies to win 777X jetliner
- RPT-UPDATE 1-Ford leans on global Mustang to burnish overseas image
Nelson Mandela: 1918 - 2013
Reuters looks at the life and times of Nelson Mandela, an icon of peace and reconciliation who came to embody the struggle for justice around the world. Video