Guy Hands’ Terra Firma Seeks New EMI Citigroup Lawsuit That Could Slow Sale (UPDATED)

(UPDATED) Guy Hands and his investment firm Terra Firma have filed a new lawsuit against CitiGroup over the bank's seizure of music label and publishing group EMI. In recent weeks, Citi has been taking bids for EMI, and a sale was expected to be completed within weeks.  But Hands legal action could scare away potential buyers or even temporarily halt the sale.

Executives from Universal, Sony, WMG and Bertlesmnan have all made it known that they are taking a serious look at EMI. It is unclear, if there interest will waiver now.

In the new legal action, Hands is seeking to learn what grounds Citi used to take control  of EMI, as well as, its valuation of the music group.  Hands maintains that Terra Firma  was up to date on all debt payments when Citi took control of the music group, sources told The Guardian.

A procedural hearing apparently took place on Tuesday, when an application for information was made by Terra Firma's lawyers.

UPDATE: Late in the week Citigroup reportedly told some potential buyers that they would indemnify  against future Terra Firma lawsuits. No details yet on the limits of Citi's offer or investor reaction.