UPDATE 1-Citi banker can’t remember key calls in EMI case

* Banker Wormsley on witness stand all day

* Dispute over 4 billion pound buyout of EMI in 2007

* High stakes civil fraud trial for Terra Firma and bank
(Adds banker doesn’t remember specifics of phone calls with

By Grant McCool

NEW YORK, Oct 26 (BestGrowthStock) – A Citigroup Inc (C.N: ) banker
testified on Tuesday that he could not remember specifics of
any of the phone calls that are at the heart of a civil fraud
trial over Terra Firma private equity chief Guy Hands’s $6.4
billion purchase of EMI in 2007.

David Wormsley, one of Citigroup’s top European bankers,
also told a jury of nine New Yorkers that his onetime friend
Hands misrepresented him to EMI during the bidding for the
music company. The banker also denied advising Hands to bid
high, an assertion made by Terra Firma in suing the bank in
December 2009 for fraud and is seeking up to $8 bln in

“I don’t remember any of the calls specifically,” Wormsley,
wearing a navy blue suit, light blue shirt and silvery gray
tie, said in U.S. District Court. “I remember speaking to him
over the weekend on the subject of financing.”

The EMI deal has come to reflect some of the worst aspects
of the credit boom, when companies were loaded with debt.

Hands has testified that Wormsley, 50, had lied to him in
three phone calls on the weekend of May 18-20, 2007 about a
rival bid for EMI from Cerberus Capital Management LP at 262
pence per share. As it turned out, there was no rival bid, and
Terra Firma’s bid of 265 pence per share was the only one at
auction on May 21.[ID:nN19153438]

Asked Tuesday by Hands’s lawyer, David Boies, when was the
first time he remembers Cerberus did not bid, the soft-spoken
Wormsley said: “The first time I actively remember was when the
complaint was filed. It is perfectly possible I was told before

Terra Firma buyout house paid 4 billion pounds ($6.4
billion) for EMI. The label, known for star musicians such as
Nat King Cole, The Beatles, Pink Floyd and scores of others, is
struggling under the weight of its debt. [ID: nN25292371]

The trial pitting Hands’ word against Wormsley’s centers
around three telephone conversations in the days leading up to
the EMI auction. It has provided a window into the
high-pressure world of mergers and acquisitions, with fierce
competition right up to the bidding deadline between bidding
firms, banks and senior executives.

If Terra Firma lost at trial, it could be forced to hand
over EMI to Citigroup, which provided 2.6 billion pounds ($4
billion) in loans for the acquisition.

The bank’s reputation for facilitating such deals could
suffer if the jury decided Hands had been defrauded.

During hours on the witness stand all day, Wormsley said he
received a call on May 18 from someone who said that Hands had
told a senior member of the team working for EMI on the deal
that Wormsley believed 240 pence per share would be acceptable
to the company’s board.

“I made no such comment,” the banker said, as Hands sat in
court at his lawyer’s table.

“It was completely and utterly unacceptable for him to
suggest that 240 was acceptable or likely to be recommended by
the board of EMI,” he said.

“I was furious. I demanded that he send written
confirmation to EMI that I had never made that representation
to him because I couldn’t let that lie stand,” Wormsley said.

Hands, 51, testified last week and Monday that Wormsley
told him the auction date had been accelerated, Cerberus was a
rival bidder and “not to play games” with pricing.

Wormsley testified that he may have said “not to play
games” with the price but it was in the context of Hands having
suggested 240 pence per share.

“I did not tell him to bid low, to the best of my
recollection,” Wormsley said at the trial, which started on
Oct. 18 and is expected to end by Nov. 5.

The case is Terra Firma et al v Citigroup et al, U.S.
District Court for the Southern District of New York, No.
($1 = 0.6364 pound)
(Reporting by Grant McCool; Editing by Gerald E. McCormick,
Bernard Orr)

UPDATE 1-Citi banker can’t remember key calls in EMI case