Terra Firma’s Hands says tax status at risk in EMI wrangle

* Hands says London EMI hearing could jeopardise tax status

* Says no plans to set foot in Britain for at least 2 years

* Names ex-Citigroup CEO Prince as witness

By Simon Meads

LONDON, Feb 5 (BestGrowthStock) – Buyout house Terra Firma asked New
York courts to hear the case over its troubled deal for music
company EMI, rather than shift the proceedings to London, a move
it said could jeopardise the tax status of Terra Firma founder
Guy Hands.

The private equity firm has become embroiled in an
increasingly bitter legal dispute with U.S. bank Citigroup (C.N: )
which advised on and provided the financing for Terra Firma’s
[TERA.UL] 4 billion pound ($6.3 billion) acquisition of EMI in

Terra Firma’s lawyers Boies, Schiller and Flexner filed
documents with a New York district court on Friday, arguing a
hearing in London could jeopardise Hands’s status as a Guernsey
resident and that the principal people involved in the deal were
based in New York.

It lodged a claim with a New York court last year accusing
Citigroup of inflating the price of the business by not
revealing that the only other remaining bidder, Cerberus Capital
Management, had withdrawn from the auction.

Terra Firma’s woes over the EMI deal, done at the height of
the buyout boom, were compounded on Thursday when the company
announced a full-year 1.56 billion pound net loss.

In his own declaration to the court, Hands said he was no
longer a British resident, having left the country for tax
reasons last year.

Hands said he had not set foot in Britain since last April
and has no intention of doing so until he has been out of the
country for at least three years.
“My residence in Guernsey is real, not a sham or a mere
moniker for an otherwise unvisited location,” said Hands.
“I have moved my personal effects and belongings there from
my former home in Kent to my home there. When I am not
travelling, I live in Guernsey,” he said. He added he has spent
140 days in Guernsey and 170 days travelling on business or for
personal reasons since April.

Citigroup has said the case should be moved to London as the
main parties were based in Britain.

Terra Firma’s documents also named former Citigroup CEO
Charles Prince and Michael Klein, Citi’s then global head of
investment banking, as important witnesses in the case. It
previously named David Wormsley, a senior executive at the UK
investment banking arm, as a key player in its claim for fraud.

It provided a personal email from Klein to Hands, which
read: “I am personally involved.”

Citigroup has until Feb. 11 to respond, with a court hearing
on the location of the case planned for Feb. 19, people familiar
with the situation said.

A trial date of Oct. 18 has been set.


(Editing by Sharon Lindores)
($1 = 0.6363 pound)

Terra Firma’s Hands says tax status at risk in EMI wrangle