Citi wins; hands down

Surprise, surprise. Citigroup prevailed in its bitter court battle against private-equity guru Guy Hands, who has accused the bank of tricking him and his firm Terra Firma, into overpaying for embattled music label EMI.

“Terra Firma reserves its right to appeal,” the London-based private-equity firm said in a statement.

“We are disappointed that the jury found that we did not prove that we relied on misrepresentations from Citi which caused a loss to our investors.”

Terra Firma said it plans to continue to work with Citigroup, its biggest creditor, in “securing a financial restructuring of EMI,” to reduce the music label’s mountain of debt, and the threat of appeal could go a long way to getting this done.

Hands paid a whopping $6.5 billion for EMI, which holds the rights to The Beatles catalogue, in 2007, before suing in 2009, accusing his former Citigroup banker pal, David Wormsley, of lying about a rival bid to get Hands to buy the label before he had fully fleshed out the details.

EMI quickly became a poster child of the excesses of the leverage–buyout boom as the company struggled under a mountain of debt too large for revenues to repay.

Jurors deliberated for close to five hours before handing down the verdict and ending the closely watched, three-week trial in Manhattan federal court before Judge Jed Rakoff.