Private equity firm Terra Firma is sueing Citigroup in New York courts over alleged false statements during its 2007 deal to buy EMI. Claiming that Citigroup "misrepresented fundamental facts", Terra Firma alleges that the bank fabricated a bid by Cerebus Capital Management to encourage them to pay an inflated price for EMI.
Terra Firma went on purchase EMI for $6.5 billion USD, and has since invested a total of $32.5 billion in the label and publishing group. The new lawsuit is part of an ongoing battle to force Citigroup to restructure EMI's $4.29 billion debt to the bank amid indications that the label is already on the prowl for even more cash.
According to several reports, pension funds, insurance companies and foreign banks have all been approached by Terra Firma seeking $1.6 billion in new funding even amid fears that EMI could default on interest repayments to Citigroup.