US judges weigh British buyout mogul Guy Hands' appeal
British buyout mogul Guy Hands heard a panel of U.S. judges pick away at his lawyer's arguments in an appeal of the fraud case he lost to Citibank over his takeover of music group EMI.
Hands' Terra Firma Capital Partners challenged the trial judge's instructions to the jury, which found two years ago that Citigroup was not liable for fraudulent misrepresentation in 2007 in the $6.5 billion deal. If Terra Firma were to prevail, it could get a new trial and seek damages.
A three-judge panel of the 2nd U.S. Circuit Court of Appeals did not rule immediately after the hour-long oral arguments on Thursday. A decision could be issued in several weeks or months.
Hands, 53, appeared to listen closely from the public gallery, but he declined to comment to reporters when the hearing ended.
Hands argued in his lawsuit that he was misled by David Wormsley, a Citigroup banker and his one-time friend, into overpaying for EMI at the height of the buyout bubble. The bank denied the allegations.
After the 2010 trial, Terra Firma defaulted on loans owed to the bank and Citigroup seized EMI, whose catalog of artists has included the Beatles, Queen and Coldplay. The bank agreed last November to sell EMI in pieces to Vivendi's Universal Music Group and Japan's Sony, ending 80 years of independence for the storied music group.
On Thursday, the three appeals judges posed a raft of questions over Terra Firma's central argument that U.S. District Judge Jed Rakoff incorrectly instructed the jury on English law.
At the trial, both sides had agreed that English law governed the substantive fraud claims in the case after various objections were raised and then decided by the judge.
The appeals court quizzed Hands' lawyer, David Boies, on why he was not more persistent at the time.