Financier Hands spars with Citi lawyer in US court

* Citigroup banker Wormsley on stand next week

* Terra Firma seeks billions in damages from bank

By Grant McCool

NEW YORK, Oct 22 (BestGrowthStock) – Financier Guy Hands, who
accuses a onetime friend at Citigroup Inc (C.N: ) of lying to him
about bids for EMI music company, sparred in court on Friday
under cross-examination about why he did not call the banker to
clear the air.

Hands, the head of European private equity firm Terra
Firma, sued Citigroup and banker David Wormsley for fraud last
year. He is seeking $8 billion in damages at a trial being
heard by nine jurors in U.S. District Court in New York.

The bank provided 2.6 billion pounds ($4 billion) in loans
for Terra Firma’s 4 billion pound ($6.4 billion) deal in 2007
for EMI, which is struggling under the weight of its debt. The
company that recorded the music of The Beatles, Pink Floyd and
scores of other stars, could be handed to creditor bank
Citigroup if Hands loses the trial.

“You’re accusing your good friend of 10 years of lying and
defrauding you and at no time did you pick up the phone and
tell him you thought he had misled you?” Citigroup trial lawyer
Ted Wells asked Hands.

“That’s correct, my understanding is that would be
inappropriate,” replied Hands, 51, who spent hours on the
witness stand on Tuesday, Wednesday and Friday. He is expected
to finish his testimony on Monday morning.

Wormsley, 50, is expected to tell his side of the story to
the jury starting on Monday. Hands and Wormsley remained
friends and business associates following the bid for EMI in
May 2007, attending dinner parties and other events.

The trial, featuring two high-profile lawyers in Wells and
Hands’s counsel David Boies, is expected to last three weeks.

Hands testified that, in the days leading up to the
deadline for bids on EMI, Wormsley told him in three phone
conversations that rival private equity firm Cerberus Capital
Management LP was ready to bid 262 pence per share.

Hands said Wormsley, whose bank had longtime business ties
with both Terra Firma and EMI, also told him the bid deadline
had been brought forward two days to May 21, 2007 at the
request of another bidder, presumably Cerberus.

Terra Firma “scrambled” to get financing to offer 265 pence
per share, Hands said. He said that, had the firm known the
Cerberus bid was nonexistent, it would have taken much more
time to negotiate a lower price for EMI, a company he had
coveted for about 16 years.

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
(Reporting by Grant McCool; editing by Andre Grenon)

Financier Hands spars with Citi lawyer in US court